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Neuralstem: Investigators are Very Positive on NSI-566 Results in ALS (CUR, Buy, $3.27)

Investment Perspective

The key investigators for the treatment of ALS with Neuralstem’s NSI-566 neural stem cells have been extremely positive in public statements. They are Dr. Eva Feldman, the lead investigator for the trial, and Dr. Jonathan Glass. Dr. Feldman is Professor of Medicine at the University of Michigan Health Care System and past President of the American Neurological Association. Dr. Glass is Director of the Emory ALS Center at Emory University. They are well known in the ALS community.

Both investigators have publicly stated that phase 1 results are impressive and Dr. Feldman has also indicated that phase 2 results (enrollment completed in July 2014) were also impressive. She will likely give a presentation on interim results for phase 2 at the American Neurological Association Annual Meeting during October 12 to 14, 2014. She also said that she is working very hard on the protocol for the next phase trial in ALS which should start in early 2015. CEO Richard Garr recently indicated in an interview that commercialization of the NSI-566 neural stem cells may be two years away.

This is all extremely encouraging. I continue with my buy recommendation.

Recent Comments by Dr. Glass

On September 19th, Dr. Glass reported on the phase 1 trial of the NSI-566 neural stem cells at the Annual Symposium on ALS of the Foundation Andre-Delambre, in Montreal, Canada. The presentation was not open to the public but Neuralstem released an 8-K with his comments. Dr. Glass said that 10, 11 and 12 in this trial who received treatments in the lumbar and cervical regions of the spine were showing significant slowing of the progression of the disease over a three year period. One of these patients, Ted Harrada, showed functional improvement from pre-treatment baseline, this has been maintained for over three years.  The other two patients are maintaining the same level of functionality as they had at baseline for the three years since treatment.

Dr. Glass is referring to the ALSFRS-r scale for his comments on functionality of these patients. This is a scale in which a physician grades 12 measures relating to ALS on a scale of 0 to 4. A normal person would have a score of 48 on this scale and most patients newly diagnosed with ALS have scores of 35 to 38. The decline in ALSFRS-r is inexorable with a decrease in function of about 0.5 to 0.7 points per months. Patients may stabilize for a month or two, but then the decline in functionality continues.

Patients usually die about three to five years after diagnosis when their ALSFRS-r score is 12 to 18. Dr. Glass is talking about these three patients being stable at three years when the expectation would be that they would be nearing death at that point. For a detailed description of the patients in the phase 1 trial please follow this link.

Patients 10, 11 and 12 in the phase 1 study initially received 10 injections in the lumbar region of 100,000 cells per injection. They were later brought back for five cervical injections of 100,000 cells. In total, they received 1.5 million cells. In the phase 2 dose escalation trial that was just completed, the final cohort received 20 lumbar and 20 cervical injections with 400,000 cells per injection for a total of 16.0 million cells. Based on animal studies, it is hypothesized that 16.0 million cells is the appropriate dose, but this has not been firmly established in human studies. The hypothesis is that more cells will be better. If so, I would note that the optimal dose is 10 times greater than the dose given to patients 10, 11 and 12. How would they have fared with this dose?

Dr. Glass said "The progress in this trial is truly groundbreaking. It has provided data on the safety of multiple injections and multiple transplantation surgeries in ALS patients, as well as the long- term survival of the transplanted cells in the human spinal cord.  This provides a strong foundation for moving ahead with more definitive trials focused on the potential therapeutic efficacy of spinal cord transplantation of neural stem cells for ALS."

Recent Comments by Dr. Eva Feldman

Dr. Feldman recently gave a one hour speech on ALS that included some detailed comments on the phase the NSI-566 stem cells. She has been very positive on the phase 1 results. She has made essential the same comments as Dr. Glass on the phase 1 results stating that patients 10, 11 and 12 have shown stabilized disease at three years post diagnosis.

She has indicated that the phase 2 trial has also produced encouraging results, but has not provided details. Enrollment in this trial was completed in July 2014 and the study should complete in early 2015. No interim results have been released to date, but Dr. Feldman has said “I wouldn’t be spending all my waking hours on writing the next phase trial, if I do not believe in the phase II data.” I would anticipate that she will present data on interim results at the American Neurological Association Annual Meeting in Baltimore from October 12 through 14.

Comments by CEO Richard Garr

In a recent interview, CEO Richard Garr said. “We could be as close as two years away from commercialization.”  This suggests that the next phase trial for which Dr. Feldman is writing a protocol could be a pivotal trial. The company has not indicated what the protocol for and size of the trial might be. Dr. Feldman in the past has talked about a 128 patient trial randomized 1:1. I cannot see how this trial could be blinded as I think it would be unethical to perform the surgery to a control group without being given the cells. The control group might be an observational group. However, I think it might be difficult to recruit this control group. These are desperate patients who will likely want to receive the neural stem cells.

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  1. CEO Richard Garr said. “We could be as close as two years away from commercialization.”

    I hope I am wrong. That interview gave readers the impression that Mr. Garr was talking about ALS program. But I think the commercialization may refer to the ongoing stroke program in China. I suspect the company is pursuing the approval in the Chinese military system, meaning an approval in all army hospitals in China which may be accessible to 20-30% of the whole population.

    The bar for army hospitals in China is quite low. I have the impression the army hospitals are Wild West even in the Chinese health industry.

    Therefore in my opinion the company has a high chance of getting approval for stroke in China, at least in the military system. Mr. Garr also mentioned in preparation of 70k manufacturing capacity for stroke in the recent Rodman & Renshaw show.

    The real question about the stroke program is whether the company could make loads of money. However from an investor’s perspective, the announcement of approval in China will be a major catalyst down the road. So I will start to worry about that after the nice run on good news.

    Actually I wrote a letter to the company in June this year, suggesting the price tag of the stroke program could be as high as 30K USD if the clinical trial results are meaningful. I am hoping they could show a one-point difference in the modified Rankin score. However in China, you have to give the hospital the majority of your revenue as selling drug is the main reason which keeps the doors of business open. A price tag of 30K could transform to 10-15K revenue to the company. But Garr’s recent comment made me guess they would not charge as high as I wanted. Anyway, guessing is a good exercise in the long waiting process.

    As I have stated in the beginning, I hope I am wrong about the commercialization. The prediction of the outcome of the US commercialization for a disease as severe as ALS is an easy task. But for the stroke program in China, I think the company itself could have difficult of grasping the magnitude of the opportunity.

  2. Re the upcoming pivotal trial for ALS, I predict that the FDA will grant accelerated approval to allow all patients selected to undergo surgeries and injections with no control group.required. The recovery of each patent will be closely monitored and measured against current efficacy parameters. Since the historical rate of progression is well established, the outcome for each patient will be measured against that standard,
    Does this seem logical to you? Thank you.

  3. Last week (September 2014 reporting) FDA CBER granted a new Breakthrough Designation. Could this be for NSI-566 as no other company has yet to come forward on this? May also relate to Dr. Feldman mentioning in the video how she submitted the data (early August) to the FDA which was a bit odd since phase II followups hadn’t been completed.

  4. I have no insight beyond what you have stated


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