Greetings, and welcome to the Brainstorm Cell Therapeutics First Quarter 2023 Earnings Call. At this time, participants are in a listen-only mode. As a reminder this call is being recorded. I'd now like to introduce your host for today's call, Michael Wood of LifeSci Advisors. Mr. Wood, you may begin.

Good morning and thank you for joining us. Earlier today, Brainstorm issued a press release with its financial results for the first quarter of 2023, including a corporate update. Before passing it over to the company management for prepared remarks, I want 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 diseases such as ALS, the sufficiency of the company's existing capital resources for continuing operations in 2023 and beyond, the safety and clinical effectiveness of the NurOwn technology platform, clinical trials of NurOwn 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's 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 conference call and the company undertakes no obligation to publicly update any forward-looking statements. Joining us on the call this morning will be Mr. Chaim Lebovits, President and CEO of Brainstorm; Dr. Stacy Lindborg, Co-Chief Executive Officer; and Alla Patlis, Interim Chief Financial Officer. In addition, the Company's Executive VP and Chief Medical Officer, Dr. Kirk Taylor is also on the call and will be available to answer your questions during the Q&A session. So with that, I'd like to turn the call over to Mr. Lebovits. Please go ahead.

Thank you, Michael. Good morning, and thank you to all of you who have joined us to discuss our Q1 2023 financial results and recent progress. The most important recent development for Brainstorm was that the FDA notified us that there will be an advisory committee to discuss our BLA. We'll announce the date as soon as we know it. We remain confident that holding the ADCOM will be the fastest and most appropriate way to fulfill our regulatory obligations and commitment to patients. It will ensure a full and publicly accessible discussion that includes FDA reviewers, the company's experts, and investigators who conducted the clinical program, along with input from all relevant stakeholders in the ALS community based on their respective expertise, experience, and points of view. Brainstorm firmly believes our data support regulatory approval of NurOwn. A thorough analysis of NurOwn Phase 3 data shows evidence of clinically meaningful effectiveness, and we are further encouraged by the strong and consistent biomarker data, which are predictive of clinical response to the trial span pathways important to ALS: neuroinflammation, neurodegeneration, and neuroprotection. Now, I will turn the call over to Dr. Stacy Lindborg for a more detailed review of the NurOwn's dataset and highlights of our actions to support the BLA. This morning we are fortunate to be sitting in the same room, myself with Dr. Lindborg, and with Dr. Kirk Taylor. Thank you, Stacy.

Thank you, Chaim. As Chaim just highlighted, one of the reasons an ADCOM remains a critical step towards our goal of fulfilling our commitment to ALS patients relates to the complex scientific issues that need to be discussed and addressed. We have assembled a robust data set that will benefit from a deep and thoughtful discussion. The process for approval of any BLA will be determined primarily by the body of evidence generated. And on this front, we firmly believe that NurOwn's data package is strong enough to support regulatory approval. We are grateful to the FDA for the opportunity to review the full body of clinical evidence with all key stakeholders in the open and transparent setting provided by an ADCOM. Since we first announced the top line data from NurOwn's Phase 3 trial, we have conducted a number of additional focused analyses. These analyses provide valuable insights into the trial outcomes and have helped us better understand NurOwn's treatment effect. As disclosed previously, the Phase 3 trial did not reach statistical significance on the primary and secondary endpoints. However, in a pre-specified group of participants with less advanced disease at baseline, there was a clinically meaningful treatment response on the primary and secondary endpoints with NurOwn compared to placebo. On the secondary endpoint, which was favored by the FDA, the average change from baseline to week 28 on the ALS functional rating scale, the treatment difference was statistically significant at the level of P > 0.05. These findings are important as looking at this pre-specified subgroup enabled us to focus on data that was not as impacted by the floor effect in the scale. Furthermore, post hoc sensitivity analyses of participants across baseline thresholds of 27 to 35 on the same secondary endpoint showed that NurOwn treated participants retained on average 2 points of function more compared to those who were on placebo. This is a clinically meaningful result, representing important preservation of function and quality of life for people living with ALS, as well as their loved ones. Additional post hoc analyses that account for the floor effect in different ways have been presented at scientific meetings and each demonstrated similar findings and an important treatment effect with NurOwn across study endpoints. One of these analyses presented very recently at the Muscular Dystrophy Association Clinical and Scientific Conference focused on participants with no evidence of a floor effect at baseline. The defining feature of this analysis was the ability of the scale to measure ongoing decline in all scale items at baseline rather than focusing solely on participants' baseline values. This analysis included more than half of the participants in the trial, with baseline scores ranging from 25 up through 46. On the primary endpoint, the clinical response analysis observed an 18% difference between treatments, with a 41% response rate with NurOwn and a 23% response rate and a p-value of 0.35. On the secondary endpoint, average change from baseline to week 28, NurOwn treated participants retained on average 2.3 points of function compared to placebo again with a significant p-value of 0.04. The last piece of evidence that I'll comment on relates to our strong and consistent biomarker data generated in our Phase 3 trial. NurOwn's clinical program has the distinction of being the largest CSF biomarker study ever conducted in ALS. We identified biomarkers relevant to ALS pathology and rigorously analyzed them, resulting in three important observations. Number one, treatment with NurOwn impacts three pathways important to ALS. Across these pathways, NurOwn treated participants showed significant increases in markers of neuroprotection and decreases in markers of neuroinflammation and neurodegeneration over time compared to placebo. This means we achieved target engagement and confirmed the mechanism of action of NurOwn in Phase 3. Number two, we observed biological activity with NurOwn across these pathways important to ALS in all NurOwn participants, including those with advanced ALS, where the ALS functional rating scale demonstrated measurement challenges. Number three, statistical modeling identified CSF biomarkers predictive of clinical outcomes observed in the Phase 2 trial following treatment with NurOwn using baseline data following treatment. This was not true for placebo. In summary, we can objectively show that the ALS functional rating scale was unable to measure ongoing decline in participants with the most advanced ALS who were enrolled in the trial, a unique sample of trial participants relative to other approved products. Based on the data I've just walked you through, we have clinical and biomarker data that demonstrate evidence of significantly better outcomes in participants treated with NurOwn. We have amassed efficacy and safety data that we believe supports a positive benefit-risk evaluation of NurOwn. Lastly, we continue in our efforts to engage with neurologists, other important scientists, and with the patient advocacy community as we continue through the regulatory process. During the first quarter, I had the opportunity to present on NurOwn at the MDA Clinical and Scientific Meeting and at the California Annual ALS Research Summit. We also continue to receive requests from organizations dedicated to ALS, requesting we present our data as they prepare to participate in our upcoming Advisory Committee Meeting. I share these examples so that you know we are doing everything we can to engage with different parts of the ALS ecosystem. Now I will turn the call back to Chaim for some additional comments.

Thank you, Stacy. Given our confidence in the clinical data for NurOwn regarding ALS and the urgent need for broader access to new therapies, we have started to enhance our medical, regulatory, and advocacy teams in anticipation of growth. Our goal is to move swiftly in the coming months so that, if we obtain approval for NurOwn, patients and families can access it as soon as possible. On May 1, we appointed Dr. Kirk Taylor as Executive Vice President and Chief Medical Officer. Kirk has over 26 years of experience in global drug development, from Phase 1 trials to post-approval studies across various therapeutic areas, including neurology and rare diseases. He joins Brainstorm from EMD Serono, where he served as Senior VP of North American Medical Affairs and played a crucial role in the launch of three new treatments. At Brainstorm, Kirk will lead the global medical affairs function and launch initiatives, which will include planned product launches and enhancing our relationships with the medical community. We are thrilled to welcome someone with Kirk's experience to our team. He is participating in the call today for the Q&A session. I would also like to highlight two additional hires: Antonio Trejo as VP of Regulatory Affairs and Robin Wallace as Vice President of Global Clinical Operations. Each has around 25 years of relevant experience. Antonio is known for his global regulatory expertise in specialty products, including CNS, oncology, and rare diseases, having worked with regulatory agencies in the U.S., Canada, Japan, Israel, and several Latin American countries. Robin has a strong history in clinical operations leadership across various programs at both large companies like Novartis, Merck, and Amgen, as well as smaller biotech firms. I am excited to welcome these talented individuals to our team, and I believe they share our enthusiasm for NurOwn's potential. We are looking forward to a bright future with them in their new roles. Lastly, I want to briefly address the FDA's accelerated approval of a new treatment for ALS in April. This marks the second new drug approved in less than seven months, the first being a different drug in 2022. We are closely monitoring these developments and commend the sponsoring companies for their efforts to deliver new treatments to the ALS community. We are encouraged by the regulatory flexibility the FDA has demonstrated in approving these new products for ALS treatment. I will now pass the call to Alla to discuss our financials. Alla?

Thank you, Chaim. It is my pleasure now to walk you through our first quarter financial results. Brainstorm's cash, cash equivalents, and short-term bank deposits were approximately $2.2 million as of March 31, 2023. This compares to $3 million on December 31, 2022. Our research and development expenditures for the three months ended March 31, 2023 and 2022 were approximately $2.9 million and $2.6 million respectively. General and administrative expenses for the three months ended March 31, 2023 and 2022 respectively were $2.2 million and $2.9 million. Net loss for the three months ended March 31, 2023, was $5.1 million or $0.14 per share as compared to a net loss of approximately $5.4 million or $0.15 per share for the three months ended March 31, 2022. I'll turn it back to Chaim to close the call.

Thank you, Alla. And Michael, please read the Q&A and after you read the questions, we will then open - the operator, Jenny will then open the call for anyone on the line having additional questions. Thank you, Michael.

Yes. First question is, do you have a firm date for the upcoming advisory committee?

No, we don't yet have a firm date. And once we will have, we will share that with you.

Okay, thanks. Next question regarding the Phase 3 study, why did Brainstorm design the Phase 3 to allow participants with advanced ALS unless the inability to measure their progress during the study?

Stacy?

Yes, we've reflected on this question internally. In addition with our esteemed clinicians who were PIs for the trial. The Phase III study design was being conceived in 2016 and was submitted to the FDA as part of our R&D in 2017. The reality is the floor effect level associated with the ALS functional rating scale was not understood well by the industry at that time. In fact, even in the early days following the database lock when we were first understanding that the scale was not able to measure a decline in participants with the most advanced disease, we looked in the literature to document this phenomenon specifically with the ALS functional rating scale. We hardly could find any articles addressing it explicitly. We found articles that referenced an insensitivity at the lower end of the scale. But no one had ever had a large enough sample of participants with advanced ALS such that the floor confounded treatment estimates. This level wasn't established. We know this is no longer the case. In fact, every trial being designed today is taking this into account. And even ongoing trials are amending their analyses plans to include analyses to minimize the floor effect. In R&D, as a biotech industry, we know it's not for the faint of heart and it requires the ability to constantly learn. It's not unusual to learn something new in a trial and the steps you need to go through when you do are well understood. First, you need to carry out all analyses as originally described and share them openly. Second, you define what was observed in the trial that was not anticipated. Third, you produce analyses that appropriately address what was observed. We've done each of these steps. And I guess in some sense, our learning that can be very objectively measured and displayed as a blessing. At the end of the day, what we are facing is a scale measurement problem, which we can address and bring forward evidence of a positive benefit-risk evaluation of NurOwn that we believe warrants approval.

Thank you so much. Michael?

Next question, does BrainStorm believe that it must have a biomarker analysis published in order to be successful at the ADCOM? There is a related question: You've been talking about the new biomarker manuscript for a long time now; what have been the challenges in getting it published?

Thank you, Stacy.

Do we believe it needs to be published to be successful in ADCOM? No, we don't believe this is necessary. But we do think that the more data we publish, the more informed the community will be. From a status perspective, the manuscript is in the hands of all the authors as we speak for a final review and then it will be submitted. What I can tell you is that it's a rigorous paper through which we've generated valuable insights into the pathology of ALS that will aid in the development of future therapies, and we're optimistic it will be published in advance of the ADCOM. Obviously, this is out of our control.

Thank you.

Our next question, are you willing to partner with a large-cap biopharmaceutical company to accelerate clinical trials for ALS and for other indications?

Well, we're always willing to entertain partnerships that are in the best interest of the company and further our ability to accelerate the development of treatments for patients in need, sure.

Thanks. I have one more question. It is actually for Dr. Kirk Taylor. This investor said he was pleased to read the press release announcing Kirk's hiring as Chief Medical Officer. Kirk, can you share some perspective on exactly what motivated you to join Brainstorm?

Thank you, Michael. I appreciate it. Yes, the unmet medical need and the possibility of bringing a new treatment to the ALS community were key motivators for me to join Brainstorm. Also, I'm honored to join the world-class team of researchers and biotech professionals that Chaim and Stacy have assembled. We're onto great things. Thank you.

Thanks, Kirk. That concludes the inbound questions.

Thank you so much, Michael. Jenny, would you open the call for questions and also advise participants on the call how they can ask?

No problem, Chaim. Thank you. Your first question is coming from David Bautz of Zacks Small-Cap. David, your line is live.

Hi, good morning, everybody.

Good morning.

Quickly on the ADCOM and the potential data, how much lead time does the FDA usually give between announcing when the meeting is going to be and when it actually occurs?

David, it's a very good question. Due to this, I like this opportunity to dive in a little bit more into this. Many are asking this from us offline, not actually for this call only. So the FDA has the right to give this ADCOM between - until it has to be held before the PDUFA date, obviously. We don't know yet if this will be priority review or not a priority review. We do understand that when - the process we went through may be somewhere in the middle. I can tell you that the FDA is actively working on the ADCOM date; they are discussing with us dates. So it's happening. We're just waiting to have the final confirmative date, and once we have that, we'll announce it. So I can tell you it's going to be in the next few months. It's quite clear.

Okay. Now at the ADCOM, there's always an open public hearing where essentially anyone can come and I believe testify? Does the company have any control over who gets to speak at that portion of the meeting?

Well, usually no. Everyone has a right to register for that meeting and speak.

Okay.

I'm sure you're familiar with that, David.

Okay. And lastly, what is the company strategy for advancing NurOwn in other jurisdictions? And do you think that another clinical trial is going to be necessary to get approval outside the U.S.?

Well, we look all the time at other jurisdictions. We now have an add-on in the team as you heard with Antonio, and he's also really working on that as well. He has a lot of experience, but to be very clear, we're very focused now on the Advisory Committee Meeting here. We're going to come as strong as we can, and we anticipate getting approval here, albeit with a confirmatory trial probably, but we'll be able to discuss that in a later time.

Okay sounds good. Thanks for taking my questions.

Thank you so much, David.

Thank you. Your next question is coming from Dan Michael, who is a private investor. Dan, your line is live.

Can you address your finances with only $2.2 million of cash left at the end of March? You should be out of money by about now?

Well, we are not. If you can look at the end of December, we also had a similar number. We were able to bring in through some block deals from institutional investors who provided us support. We just don't want to use the ATM at these prices. We're waiting for an opportunity where we will use the ATM. We have a $100 million facility with Ray J and Leerink, and we're just waiting opportunistically to figure out the best time.

At the moment you're using debt?

No, we didn't use debt. We had institutional blocks coming in, and we did - through the ATM do a block share.

Okay. Thank you.

Yes, we have zero debt, no convertible or any debt on our books. Thank you, sure.

Thank you very much. Okay. We don't seem to have any further questions. I will hand it back over to...

Maybe wait one more second, Jenny.

No problem. We have a question in from Richard Robbins, he is a private investor. Richard, your line is live.

Good morning. I realized that the focus is on the upcoming ADCOM. But in your press release this morning, you indicated that you're working on next-generation drugs. Could you please expand on that?

Definitely, our research and development team are working on different products and on different diseases. As you all know, we have a pipeline for NurOwn outside of ALS for MS, Parkinson's, Huntington's, and other diseases. At the same time, we have access to products which are working for other diseases as well. We will announce once we have that, but of course we have a huge R&D team working on that.

Thank you.

You're very welcome.

Thank you very much. It doesn't seem that anyone else has joined the queue, Chaim.

No problem. Thank you very much, Jenny, for this call. Thanks everyone for being with us this morning. We are geared and fired up for the ADCOM and we'll see you on the next Q hopefully, with very good news for you guys. Thank you very much.

Thank you, everybody. This does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.