BCLI Update - Progress Supports Our 10x Plus Value Range Potential

Rhea-AI Summary

BrainStorm Cell Therapeutics (NASDAQ: BCLI) has made significant progress in developing NurOwn®, a stem cell therapy for neurodegenerative diseases, particularly ALS. Key developments include:

1. Resolution of FDA CMC questions
2. Establishment of a commercialization team
3. Raising $4 million to start Phase IIIb rollout
4. Signing a CRO and lining up a commercial manufacturer

These advancements have shortened the Biologics Licence Application timeline. Despite dilution from the recent fundraising, ACF Equity Research maintains a >10x return investment hypothesis. The Phase IIIb trial, focusing on early to mid-stage ALS patients, could provide competitive advantages if successful. BCLI is also exploring non-dilutive grant funding options.

Positive

• Resolution of FDA CMC questions, indicating progress in regulatory compliance
• Establishment of a commercialization team, suggesting confidence in NurOwn® efficacy
• Successful raising of $4 million (gross) to start Phase IIIb rollout
• Signing of a CRO and lining up a commercial manufacturer, potentially shortening the BLA timeline
• Potential for additional $8.1 million cash inflow from warrants
• Positive clinical responses in early-stage ALS patients treated with NurOwn® in previous trials

Negative

• Dilution effect from recent $4 million raise and new warrants, reducing ACF's value range by ~5%
• Highly conservative market volatility assumption (beta of 1.0) used in valuation, potentially undervaluing the company

ACF Equity Research 

FROM ACF EQUITY RESEARCH HEALTHCARE TEAM

LONDON, July 24, 2024 /PRNewswire/ -- 

NASDAQ: BCLI

READ ACF EQUITY RESEARCH'S UPDATE NOTE HERE 

READ ACF EQUITY RESEARCH'S RELATED THEMATIC RESEARCH NOTE ON REGENERATIVE MEDICINE – NEURODEGENERATIVE DISEASE STEM CELLS & ALS/MND/LOU GEHRIG'S HERE

UPDATE NOTE: BrainStorm Cell Therapeutics Inc. (Nasdaq: BCLI) develops NurOwn® stem cell therapy for Neurodegenerative diseases (NDDs) – BCLI's first target is ALS (MND/Lou Gehrig's). Since initiation – PIIIb rollout begins. CMC FDA questions resolved, commercialization team in place, raised US$ 4m (gross) enabling PIIIb rollout start, signed a CRO and lined up a commercial manufacturer, shortening the Biologics Licence Application (BLA) timeline. Whilst the US$ 4m raise and new warrants dilution effect has reduced our value range ~5%, it remains well above our >10x return investment hypothesis. Our dilution bear case delivers >8x return at recent closes and we are yet to add NPVs for the European Union (EU) and United Kingdom (UK). Driving factors include the significant derisking progress news via the FDA CMC news and hiring of an experienced commercialization team, suggesting confidence in the NurOwn® stem cell therapy efficacy data to date for early to mid-stage ALS sufferers. Our highly conservative NPV (smaller US market only) has been raised. Our new market volatility (beta) assumption remains highly conservative at 1.0 vs. the public beta of 0.36. The new (+old) total ~20.7m warrants at 0.39c offer a further potential US$ 8.1m of cash inflows. BCLI is also exploring non-dilutive grant funds (an avenue of success visited before by BCLI).

Why is BCLI's PIIIb trial advantageous to investors? BCLI's PIII early stage (mild-moderate) sub-group of ALS sufferers treated with BCLI's NurOwn® (stem cell therapy) revealed positive clinical responses with respect to slowing of ALS disease progression (primary endpoint). Biomarker data is also supportive. PIIIb trial data (if successful) can convey competitive commercialization advantages and derisks the post-trials process to commercialization. The new PIIIb trial is designed to recruit a cohort of participants with ALSFRS-R scores >=40. If the new trial is successful, we expect a strong positive BCLI valuation inflection point.

ALS: High Unmet Medical Need, ALS is a fatal neurodegenerative disorder (NDD) that affects motor nerve cells in the brain and the spinal cord. There are an estimated ~450k ALS patients worldwide (30k US and 51k European).

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DISCLOSURES: ACF Equity Research has received cleared funds in advance for a minimum one year service directly from the issuer, from an exchange, from a portfolio manager; from an investor group or and from an investor relations firm. ACF Equity Research has received for any of investment/equity/credit/ESG/sustainability research a fixed paid in full in advance annual fee in the range US$35,000 to US$75,000 - service package dependent.

 

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SOURCE ACF Equity Research

FAQ

What is the current status of BrainStorm Cell Therapeutics' (BCLI) NurOwn® stem cell therapy development?

BrainStorm Cell Therapeutics (BCLI) has resolved FDA CMC questions, established a commercialization team, raised $4 million for Phase IIIb rollout, signed a CRO, and lined up a commercial manufacturer for NurOwn®, their stem cell therapy for ALS.

What is the target market for BrainStorm Cell Therapeutics' (BCLI) NurOwn® therapy?

NurOwn® is primarily targeting ALS (Amyotrophic Lateral Sclerosis) patients, with an estimated 450,000 patients worldwide, including 30,000 in the US and 51,000 in Europe.

What is the focus of BrainStorm Cell Therapeutics' (BCLI) upcoming Phase IIIb trial for NurOwn®?

The Phase IIIb trial is designed to recruit participants with ALSFRS-R scores >=40, focusing on early to mid-stage ALS patients. Success in this trial could provide competitive commercialization advantages for BCLI.

How has the recent $4 million fundraising affected BrainStorm Cell Therapeutics' (BCLI) valuation?

The $4 million raise and new warrants have caused a dilution effect, reducing ACF Equity Research's value range for BCLI by approximately 5%. However, their investment hypothesis still projects a >10x return potential.