BCLI Update - Progress Supports Our 10x Plus Value Range Potential
In This Article:
ACF Equity Research
FROM ACF EQUITY RESEARCH HEALTHCARE TEAM
LONDON, July 24, 2024 /CNW/ --
NASDAQ: BCLI
READ ACF EQUITY RESEARCH'S UPDATE NOTE 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).
