Brainstorm Cell Therapeutics Inc.

Greetings and welcome to the Brainstorm Cell Therapeutics Second Quarter 2025 Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded. And I would now like to introduce your host for today's call, Michael Wood of LifeSci Advisors. Mr. Wood, you may begin.

Thank you, Kelly. Good morning, everyone, and thank you for joining us this morning. before passing it off to company management for prepared remarks. I would like to remind listeners that this conference call will contain numerous statements, descriptions, forecasts, and projections regarding Brainstorm Cell Therapeutics and its potential future business operations and performance, statements regarding the market potential for the treatment of neurodegenerative disorders such as ALS, the sufficiency of the company's existing capital resources for continuing operations in 2025 and beyond, the safety and clinical effectiveness of the Neuron technology platform, clinical trials of Neuron and related clinical development programs, and the company's ability to develop strategic collaborations and partnerships to support its business planning efforts. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond brainstorm control, including the risks and uncertainties described from time to time in the company's SEC filings. The company's results may differ materially from those projected on today's call, and the company undertakes no obligation to publicly update any forward-looking statements. Joining us on the call this morning will be Haim Leibowitz, President and CEO of Brainstorm, Dr. Bob Dagger, Executive Vice President and Chief Medical Officer, Haro Hartonian, Executive Vice President and Chief Operating Officer, and Ala Patlis, Interim Chief Financial Officer. So I'd now like to turn the call over to Mr. Liebowitz. Please go ahead.

Thank you, Mike. Good morning, everyone. Thank you for joining us today. We appreciate your continued interest and support in Brainstorm. I want to reaffirm that our top priority is advancing Neuron into our planned Phase IIIb clinical trial. This trial called Endurance is designed to confirm its therapeutic benefit in patients with early stage ALS. As we previously disclosed, we reached a key milestone in May this year with the US FDA granting clearance to initiate this pivotal trial. This allows us to move forward with patient enrollment and we are preparing to begin that process. The trial for Endurance has been reviewed and agreed upon with the FDA under a special protocol assessment, or SPA, which confirms that the study's endpoints and statistical methods will be appropriate to support a future BLA. Assuming the data meets expectations, the SPA provides us with regulatory clarity and a strong foundation, and we believe it de-risks this program. An important part of the trial preparations is to ensure we have a robust manufacturing network to supply product for the trial. We announced during the second quarter that we secured a partnership with Minaris Advanced Therapies, a global contract development and manufacturing organization that specializes in cell and gene therapies. We have initiated the technology transfer and preparation for clinical trial manufacturing at Minaris State of the Art facility in Allendale, New Jersey. This partnership enhances Brainstorm's U.S.-based manufacturing capabilities and will complement our previously announced collaboration with Pluri Inc. in Israel, which will also contribute to the production of clinical trial materials. I want to spend a few minutes talking about a recent important regulatory development, and that is the filing of the citizen's petition with the FDA requesting a de novo review of the data-supporting neurons. This petition was filed by a coalition of ALS patients and family members. As a reminder, a citizen petition filed under the Federal Food, Drug, and Cosmetic Act is a formal process allowing any interested party to request FDA action, and this includes reviewing data or issuing new guidance. Although Brainstorm was not directly involved in drafting or submitting this petition or its contents, We, of course, welcome the FDA's willingness to reevaluate existing data. We have consistently stood by the integrity and scientific validity of the neuron data, and we support exploration of potential regulatory pathways that may allow appropriate access to this potentially valuable treatment for patients with ALS. We believe a comprehensive review of all evidence is essential, and this is even more important today as the regulatory landscape for rare disease with unmet needs continues to evolve. The Citizen's Petition is a 309-page document that incorporates a decade of data, including the results completed, neurons, trials, as well as extensive real-world evidence, such as new findings from the Expanded Access Program. The new evidence is supported by testimony from top ALS neurologists who served as principal investigators in the prior Phase III trials. Brainstorm is committed to continuing alignment with the FDA and we intend to proceed the Phase 3B endurance trial as I explained earlier. As previously announced, Brainstorm's common stock recently transitioned from the NASDAQ capital market to the OTCQB. The listing is a result of the company's non-compliance with NASDAQ listing rule 550B1 pertaining to its minimum shareholder equity requirement. While this was a challenging outcome, I want to be clear that it has no impact on our business operations, our ongoing R&D programs, or our commitments to execute on our strategic priorities. We remain fully committed to advancing Neuron for patients living with ALS and to progressing our clinical initiatives, including the planned Phase 3b trial. Our vision for the company and focus have not changed. The work being conducted by our team continues, and our dedication to serving both our patients and our shareholders remains steadfast. Brainstorm remains a reporting company under the Securities Exchange Act of 1934 and will continue to provide regular updates on our operational progress and financial position in full compliance with applicable SSU regulations. We intend to keep stockholders informed of all material developments as we assess our options for relisting on the NASDAQ. Hala?

Thank you, Haim. A research and development expenditures net for the quarter end of June 30, 2025 were 1.1 million. This compared to approximately 0.9 million for the quarter end of June 30, 2024. General and administrative expenses for the quarter end of June 30, 2025 were approximately 1.4 million compared with 2.1 million in the same period in 2024. Net loss for the quarter ended June 30, 2025 was approximately $2.9 million or $0.34 per share. This compares to the net loss of approximately $2.5 million or $0.60 per share for the quarter ended June 30, 2024. Cash equivalents and restricted cash were approximately $1 million as of June 30, 2025. I will now turn the call back to Chaim.

Thank you, Allah. Michael, do you want to read the first question, please?

Yes. First question from the investor is, when do you intend to begin the Phase 3B trial?

We have made significant progress to prepare for the trial. Our team, in partnership with one of the largest CROs, has diligently worked to advance the trial to the point of initiation. We are operationally ready. However, as many of you know, our ability to initiate the trial and remain listed on the NASDAQ was dependent on securing a significant round of funding. Just as we were closing in on that funding, the citizen's petition was filed with the FDA. While the petition has the potential to be a powerful tool that could create an opportunity for a near-term accelerated approval while performing another trial, It has also created a new regulatory dynamic. This led many key investors to adopt a wait and see approach, and we were unable to close the financing required to both initiate the trial and meet NASDAQ's minimum shareholder equity requirements. We are now actively exploring alternative funding and remain ready to accelerate as soon as a signal is given. Thank you.

Next question, what happened to the non-dilutive funding that you shared you would be applying for?

Yes, so our outstanding team did an incredible amount of work to prepare a comprehensive application for non-dilutive funding. Unfortunately, due to unexpected pause in the submission timeline from the granting organization, by the time the submission window reopened, we were unable to demonstrate the sufficient co-funding required. The funding that we had planned to raise in June would have provided the necessary co-funding, but as we mentioned, we were unable to close that round at the time and therefore couldn't submit the application yet. The good news is that once we secure that co-funding, we will be able to resubmit the application. We're actively exploring new and alternative funding resources, driven by the belief that our compelling data and the immense unmet medical need for our therapy will ultimately attract the right partners.

Thank you. And one final question. Do you plan to regain compliance and uplift to NASDAQ?

So, yes, regaining compliance and uplifting to NASDAQ remains a core strategic objective. However, our ultimate priority is to initiate the phase 3b trial and get neuron to patients as quickly as possible. We believe these two goals are linked. A positive conclusion from the FDA regarding the citizen petition, particularly an announcement that our existing data supports a BLA submission conditioned on a confirmatory trial, could be a game-changing event. Such an outcome would likely enable us to easily raise the funds needed for the Phase IIIb trial. This trial design has been granted by the FDA the first ever SPA agreement for an ALS study, which is a powerful validation of its potential to meet FDA standards for approval. I would also like to remind everyone that Neuron's potential extends well beyond ALS. It's a true platform product in the CNS space with encouraging new survival data from our expanded access program and breakthrough pharmacogenomic data presented at the ISCT 2025 meeting. We've also shown very promising results in preclinical studies for other neurodegenerative diseases like progressive MS, Parkinson's, and Huntington's. These milestones, along with the foundational science, reinforce our long-term vision. There's real momentum building, and it's rewarding to be part of something with such strong potential to make a difference. Kelly, would you want to open the call for

At this time, we will be conducting the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimal sound quality. Please hold just a few moments while we pull for questions. Your first question is coming from David Blutz with SACS Small Cap Research. Please pose your question. Your line is live.

Hey, good morning, everyone. Hi, and thanks for the update this morning. I'm curious if you could discuss what some of the potential outcomes are from the citizen's petition filing, for the company, that is.

I think I just mentioned, you know, The potential outcome would be that if the FDA would find the citizen petitions attractive and would allow or advise us to file a PLA, that would be a very exciting moment to have. We, as you know, from day one believed, and therefore we filed at the time the PLA, that this should be approved immediately. um, conditioned to a confirmatory trial and not important how you call it the phase four or phase three B trial. And so if, if the FDA today would see that after rereading the citizen's petition, that would be a wonderful outcome.

Okay. And one of the, I think one of the most important pieces of data that was in the petition and also the companies talked about is this five year survival data from the EAP. I'm wondering if you could kind of put that into context, kind of discuss why that is so important. And then one of the things that I've been hearing also, well, is it just a function of the patients were earlier in their disease, or is it actually something unique to the treatment that patients were receiving?

Yeah, so I will just begin, but I will let Bob in a moment give you more detailed answers. It's in his court, but any way you look at it, and we've spoken to many scientists, there's no question that seeing 10 out of 10 patients over five years and six out of 10 over seven years without a trach, it's impressive, very impressive. But Bob, do you want to give a more detailed answer, more educated answer?

Yeah, of course. I'd love to. Thank you for the question. It's very important for us. Obviously, we've been thinking about it a lot. So it's important to note two important aspects of the regulatory situation for brainstorm at this time when as i mentioned when the bilia was filed it was filed based on a six-month study phase three pivotal study with data up to six months basically follow-up and included an entire patient population not only focusing on the early disease so these are important characteristics we have today. So today we understand that we have survival on 10 patients that continued in the AP. So we have real world evidence beyond six months, obviously, as I just mentioned, that five years, 10 out of 10 remained alive. Shortly after five years, one participant succumbed to euthanasia by choice. And then seven years later now we have survival beyond seven years, which is unprecedented. We basically understand from the petition, obviously we don't have direct access to the data because the study is closed now, but reading into the petition and testimonies of patients and their loved ones that this survival data going without tracheostomy and invasive support et cetera, respiratory function remaining good is very encouraging for us and we hope for the FDA as well for the reviewers. So that's very critical. Also the second aspect is looking at basically the subset of population that started with early disease and did not progress to advanced disease by the time baseline came and that pivotal study is another critical aspect to look at which is basically the hallmark for the entry criteria into the next study, the phase 3B study that we are preparing to start. And that will become an important consideration and discussion that will become the confirmatory study. Have we been asked or to be asked by FDA to resubmit or BLA will be focusing on those two aspects, long-term survival, early disease outcomes, and basically hoping for an accelerated approval and followed by confirmatory study that we're committed to execute. Does that help answer all the questions or all the points about it?

Yeah, no, that was great. Really appreciate it. Thanks for taking the questions. Thank you. Kelly, any additional questions?

Yes. Your next question is coming from Jason McCarthy with Maxim Group. Please pose your question. Your line is live.

Hi, good morning. This is Joanne Lee on the call for Jason McCarthy. Thank you for taking our questions. So for the first one, could you just walk us through or just perhaps, I guess, remind everyone the distinction between citizens petition and broader public support or demand for your own approval. And then if you could just outline brainstorms plans that remain unchanged, namely securing the SPA aligning manufacturing and initiating the Phase 3B confirmatory study. Just from our perspective, I think it's important to underscore that the path for Neuron has always been to advance through the full clinical development process, and that can't be emphasized enough. So if you could just walk us through that, that'd be appreciated.

Yes, Joanna. So to clarify your question, you were asking the difference of a citizen petition versus just a regular petition to the FDA?

Yeah, just like to be broader public support or just like demand for neuron approval.

Yeah, citizen's petition is a regulatory pathway, not commonly used in this type of situations. And also, you don't see citizen's petition commonly 309 pages. So I must commend that the group that did this competition put in a lot of work, months and months of work. It's almost as a work put up into finding a BLA. And they also have the possibility, which a company doesn't have, and Bob spoke to that a moment ago, you know, we can't follow up patients after the trial is over, the follow-up of the trial. They did interview many people, and they are allowed to, citizens and their families, and they speak to each other. So they introduce a little bit more information than what we had, just like we mentioned before on the EAP patients. We learned from reading the petition that for so many years after treatment, patients are stable with their breathing without having trachea or anything like that. Yeah, but Bob, you want to comment on the second half of the question?

Yeah, thank you for the question. I think the key important point here is that there is, should I use the word obligation or the FDA will respond and has to respond to a citizen's petition. So as I mentioned, it's a pathway established and less used, less often used. So the outcome from that is basically that the quality of the evidence presented in the over 300 pages will be met by reviewers at FDA that will have to make a determination what to do next. as was mentioned repeatedly, that will not change our plans. Our clinical development plan is to, for us and for, we owe it for the patients, the community and the clinicians that we want to know the benefits of neuron by minimizing all biases and by basically executing this special protocol assessment agreed, the SPA agreed protocol with FDA, which honed in all the important aspects to have a clear determination, does our therapy benefit patients? What type of patients? And we understand and we share that earlier in the disease are the strongest signals from the phase three study that we conducted and the biomarker data and follow up. So the study will have a Double-blind phase, that's six months, followed by open-label phase, another six months. So it gives us one year of follow-up on survival and biomarker and other aspects. So we're hoping that we will hear back. The FDA will have to render their opinion, and that will be the next step for us, will be to meet with them and discuss the plan moving forward.

Got it. I appreciate the color. And you sort of touched on this, but just turning to the FDA, we're wondering if they're open to looking beyond ALS, FRS scores as a gold standard endpoint, just given its limitations with such heterogeneous patient population and just sort of considering other meaningful measures such as overall survival, times of ventilation, or even changes in quality of life as supportive for an approval pathway. Thank you.

Thanks for that question. Bob is back from a conference. Maybe that was discussed there. No, we cannot talk on behalf of FDA, of course, but what you raised in your question, many are raising, but in our trial, the primary endpoint is ALS-FRS-R score, and Bob can elaborate on that. In the conversations we had for the SPA agreement, it was very clear that the FDA is still looking at ALS-FRS-R as the gold standard endpoint. Others are only exploratory endpoints for them. Also, in another conference, we were there a few months ago, which I participated, James Berry, who is the co-chair for Niels, while talking about many other endpoints, believes that in the next five to ten years, ALS FRSR will still be the primary gold star endpoint. But maybe you had your new insights just coming back from the ALS Nexus conference. Bob, please feel free to share.

Yeah, thanks for that. Today is the last day of the conference. And obviously, your question is very important, and the entire field is very interested in it. The points are these, that it is clear that under our SPA-agreed protocol, the change from baseline ARFS is the primary endpoint, and that will not change. And to change that, we'll have to go back and rediscuss the protocol with FDA and have basically The proposed alternative, which we don't have today, the field, and we have been investigating this for a long time, does not have a replacement today. In the past, 20 years ago plus, when Lilazole was approved was based on a long study and having survival as endpoint. Unfortunately, we cannot do that today. Obviously, we cannot keep people on placebo for a very, very long time to assess survival and basically not be able not able to run two, three year studies to determine that. So with the gold standard today of running six, maybe nine months studies, short studies, the functional assessment remains the standard. However, there are a lot of talks about adding biomarkers and, you know, quality of life or in our case here, we have the benefit of real-world evidence that we'll be discussing with the agency in those 10 EAP patients that we can talk about. But again, that's not going to change the current plan for us with our confirmatory study using the ALS-FRS as the primary endpoint.

Got it. Very helpful. Thanks again, and looking forward to hearing more updates on your own as things progress.

Thank you very much, Gianna. Kelly, we have time for one more question as we're coming to the top of the hour.

Certainly. Your next question is coming from Deborah Bellina. She is a private investor. Please pose your question. Your line is mine.

Hi. My name is Deb Bellina. My son was diagnosed with ALS at just 28 years old. After his diagnosis, Matt was unable to qualify for a clinical trial. He sought to pass the right to try law, which was named after him. Our family is encouraged by this FDA commissioner's commitment that they're going to honor the spirit and the language of the right to try law. Just as a background, Matt received seven doses of Neuron under the right to try law. And though we were unaware of the citizen's petition, which I'm very interested in, we fully support it. I read it through and through because the FDA never had an opportunity to evaluate Matt's real world evidence as documented in his VA records. As an aside, his neuron treatment was performed at the VA under the Right to Try law. Matt's evidence provides really unique data points for the FDA to consider. Importantly, Matt is the only one in the United States of America who has received six consecutive doses at two-month intervals. He appears to have the largest magnitude and the longest-lasting improvement when he received neurons. Matt's baseline score was 2148. He had already lost more than half of his function on the ALSFRS R score. On Neuron, he regained and sustained six points of function over that period of time. He stopped using a BiPAP to breathe. He was able to stand up out of his wheelchair unassisted for the first time in two years, and this has never happened in any other ALS trial that I'm aware of. Applying the commissioner's common sense test, mass evidence, and I do truly hope they get to see it, proves that Neuron works. As a mother, I've seen it. I've watched it. I'm also a Lean Six Sigma Black Belt, so everything I do is based on evidence. As Matt was a Navy pilot, he, as a Navy pilot, had ten times the risk of getting ALS. And as a result of his service to our country, We join in support of this citizen's position. We believe that Matt has a right to have his compelling evidence, which is very well documented, considered by the FDA. And thank you for your time, and I appreciate this opportunity.

I don't know what to say, Deb. I was chuckling when they said private investor. Of course, we know you, and we're very, very proud that you were able to provide treatment to a Navy colonel like your son. Very brave person. And it's the only exception we made to go with the right to try, even though there was some controversy, as you know. We went with it. It was his name. He fought for that.

Yeah, I'm not a private investor, by the way. I'm just a mother. So I just wanted to make sure everybody knows that I'm not an investor. Thank you. I was not sure how I ended up in the queue this way, but here I am with our story. And he was still eating. He is still breathing on his own. And his last dose was five years ago this month.

Yes, Deb. And as you know, we share your enthusiasm about our product, as you know. And we do thank everyone that's trying to create FDA to have a second look into this. All agree that we should try to do another phase 3B trial. It depends on funding. FDA allowing a refile BLA trial. allowing a pathway for an accelerator approval would probably make it very easy to do this trial. So we're all on the same page here, Deb.

Thank you for sharing.

I know you did that in a panel a few months ago in a conference that I participated. It was very, very moving. You had more time than what on a call with investors, but I appreciate you calling in this morning. I really appreciate that, and send our best to Matt.

Yes, and if you want to see the data, I have it. Thank you. Actually, it's in the petition. Thank you.

Thank you so much.

There are no questions in queue at this time, and the Q&A is concluded. I would now like to turn the floor back over to management for any closing remarks.

I just want to wish everyone a wonderful day, and hopefully in the next call we're going to be after very good news. Thank you very much.

Thank you, everyone. This does conclude today's conference. You may disconnect your phone lines at this time. Thank you for your participation.