Neuralstem, Inc. (Nasdaq:CUR), a biopharmaceutical company focused
on the development of central nervous system therapies based on its
neural stem cell technology, reported its financial results and
provided business and clinical updates for the three and nine month
periods ended September 30, 2016.
“This is an exciting time for Neuralstem, as we
successfully continue to execute the new operational and clinical
development strategy that was implemented in the beginning of the
year,” commented Rich Daly, Chief Executive Officer. “The recent
announcement of the $20 million strategic investment from Tianjin
Pharmaceutical Holdings Co., Ltd. provides credibility for our
technology and a healthy financial runway through 2017.
Furthermore, we reached 50% enrollment for our NSI-189 Phase 2
study in major depressive disorder ahead of schedule, maintaining
expected data results in the second half of 2017.”
Recent Business and Clinical
Highlights
- In May 2016, we enrolled the first subject in our NSI-189 Phase
2 clinical trial for the treatment of major depressive disorder
(MDD).
- In June 2016, we announced new NSI-189 preclinical data showing
enhancement of mouse long term potentiation (LTP), an in vitro
biomarker of memory by NSI-189 in a concentration-dependent and
time-dependent manner. We believe that this study not only suggests
the cognition enhancing potential of NSI-189, but also contributes
toward the understanding of its mechanism of action.
- In September 2016, we entered into a definitive agreement with
Tianjin Pharmaceutical Holdings Co., Ltd. for a private placement
of common stock and convertible preferred stock for gross proceeds
of $20 million. This agreement is expected to close in the fourth
quarter of 2016.
- In September 2016, we achieved 50% enrollment in our Phase 2
clinical trial evaluating NSI-189 for the treatment of major
depressive disorder (MDD).
- In September 2016, we presented preclinical data which showed
that NSI-189 was effective in the prevention and reversal of
diabetic neuropathies in Type 1 and Type 2 diabetic mouse
models.
- In October 2016, we presented preclinical data which showed
NSI-189’s ability to ameliorate radiation-induced cognitive
impairment and to protect hippocampal neurogenesis in a mouse model
of brain injury due to radiation therapy of brain cancers.
Results of Operations for the Third
Quarter 2016
Research and Development expenses increased
approximately $198,000 or 6% for the three months ended September
30, 2016 compared to the comparable period of 2015. This was
primarily attributable to increased spending on clinical trials
associated with our on-going Phase 2 MDD study, partially offset by
salary and benefits saving associated with our reduction-in-force
in May and reduced manufacturing
expenses. General
and Administrative expenses decreased approximately $478,000 or 26%
for the three months ended September 30, 2016 compared to the
comparable period of 2015. This was primarily due to a reduction in
salaries, benefits and consulting expenses as a result of our May
2016 reduction-in-force.
Other expenses, net totaled approximately
$303,000 and $440,000 for the three months ended September 30, 2016
and 2015, respectively. Other expense, net in 2016 consisted
of approximately $538,000 of losses related to the fair value
adjustment of our derivative instruments and $240,000 of interest
expense primarily related to our long-term debt, partially offset
by a gain of approximately $459,000 related to our entering into a
reimbursement agreement with a former executive officer.
Other expenses, net in 2015 consisted primarily
of approximately $464,000 of interest expense principally related
to our long-term debt partially offset by approximately $24,000 in
interest income.
Results of Operations for the Nine
Months Ended September 30, 2016
Research and Development expenses decreased
approximately $758,000 or 8% for the nine months ended September
30, 2016 compared to the comparable period of 2015. This was
primarily attributable to a decrease in manufacturing costs
associated with producing clinical supplies of NSI-189 partially
offset by an increase in pre-clinical and clinical trial expenses
related to the initiation of our Phase 2 MDD study.
General and
Administrative expenses increased approximately $937,000 or 19% for
the nine months ended September 30, 2016 compared to the comparable
period of 2015. This was primarily due to a severance accrual and
increased non-cash stock based compensation resulting from the
accelerated vesting of options, both related to the resignation of
our former Chief Executive Officer coupled with non-cash stock
based compensation expense resulting from grants to our new Chief
Executive Officer which were partially offset by a decrease in our
employee bonus expense.
Other expenses, net totaled approximately
$694,000 and $1,334,000 for the nine months ended September 30,
2016 and 2015, respectively. Other expense, net in 2016
consisted of approximately $949,000 of interest expense primarily
related to our long-term debt and $464,000 of fees related to the
issuance of our derivative instruments, partially offset by a gain
of approximately $459,000 related to our entering into a
reimbursement agreement with a former executive officer of the
Company and $219,000 of gain related to the change in the fair
value adjustment of our derivative instruments.
Other expenses, net in the nine months ended
September 30, 2015 consisted primarily of approximately $1,377,000
of interest expense principally related to our long-term debt
partially offset by approximately $54,000 in interest income.
Neuralstem, Inc. |
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Unaudited Condensed Consolidated Statements of
Operations and Comprehensive Loss |
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Revenues |
$ |
2,500 |
|
|
$ |
2,500 |
|
|
$ |
7,500 |
|
|
$ |
7,917 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Research and
development expenses |
|
3,589,793 |
|
|
|
3,392,086 |
|
|
|
9,130,012 |
|
|
|
9,887,750 |
|
General and
administrative expenses |
|
1,329,712 |
|
|
|
1,807,934 |
|
|
|
5,862,374 |
|
|
|
4,925,389 |
|
Total
operating expenses |
|
4,919,505 |
|
|
|
5,200,020 |
|
|
|
14,992,386 |
|
|
|
14,813,139 |
|
Operating loss |
|
(4,917,005 |
) |
|
|
(5,197,520 |
) |
|
|
(14,984,886 |
) |
|
|
(14,805,222 |
) |
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
Interest income |
|
17,293 |
|
|
|
24,149 |
|
|
|
41,862 |
|
|
|
53,802 |
|
Interest expense |
|
(240,462 |
) |
|
|
(464,197 |
) |
|
|
(949,375 |
) |
|
|
(1,377,004 |
) |
Change in fair value of
derivative instruments |
|
(538,261 |
) |
|
|
- |
|
|
|
219,014 |
|
|
|
- |
|
Gain on related party
settlement |
|
458,608 |
|
|
|
- |
|
|
|
458,608 |
|
|
|
- |
|
Fees related to
issuance of derivative instrument and other expenses |
|
(456 |
) |
|
|
- |
|
|
|
(463,798 |
) |
|
|
(10,326 |
) |
Total
other income (expense) |
|
(303,278 |
) |
|
|
(440,048 |
) |
|
|
(693,689 |
) |
|
|
(1,333,528 |
) |
|
|
|
|
|
|
|
|
Net loss |
$ |
(5,220,283 |
) |
|
$ |
(5,637,568 |
) |
|
$ |
(15,678,575 |
) |
|
$ |
(16,138,750 |
) |
|
|
|
|
|
|
|
|
Net loss per share -
basic and diluted |
$ |
(0.05 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.18 |
) |
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding - basic and diluted |
|
114,855,581 |
|
|
|
91,569,826 |
|
|
|
104,248,993 |
|
|
|
90,532,073 |
|
|
|
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
Net
loss |
$ |
(5,220,283 |
) |
|
$ |
(5,637,568 |
) |
|
$ |
(15,678,575 |
) |
|
$ |
(16,138,750 |
) |
Foreign
currency translation adjustment |
|
21 |
|
|
|
(2,275 |
) |
|
|
1,516 |
|
|
|
(2,280 |
) |
Comprehensive loss |
$ |
(5,220,262 |
) |
|
$ |
(5,639,843 |
) |
|
$ |
(15,677,059 |
) |
|
$ |
(16,141,030 |
) |
|
|
|
|
|
|
|
|
Neuralstem, Inc. |
|
|
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|
Unaudited Condensed Consolidated Balance
Sheets |
|
|
|
|
|
September 30, 2016 |
|
December 31, 2015 |
|
|
|
|
ASSETS |
|
|
|
CURRENT
ASSETS |
|
|
|
Cash and cash
equivalents |
$ |
5,676,129 |
|
|
$ |
4,716,533 |
|
Short-term
investments |
|
- |
|
|
|
7,517,453 |
|
Trade and other
receivables |
|
12,685 |
|
|
|
37,316 |
|
Current portion of
related party receivable, net of discount |
|
51,733 |
|
|
|
- |
|
Prepaid expenses |
|
946,943 |
|
|
|
1,159,782 |
|
Total current
assets |
|
6,687,490 |
|
|
|
13,431,084 |
|
|
|
|
|
Property and equipment,
net |
|
315,543 |
|
|
|
343,200 |
|
Patents, net |
|
984,125 |
|
|
|
1,103,467 |
|
Related party
receivable, net of discount and current portion |
|
413,466 |
|
|
|
- |
|
Other assets |
|
49,984 |
|
|
|
71,797 |
|
Total
assets |
$ |
8,450,608 |
|
|
$ |
14,949,548 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
EQUITY |
|
|
|
CURRENT
LIABILITIES |
|
|
|
Accounts payable and
accrued expenses |
$ |
2,484,335 |
|
|
$ |
1,455,826 |
|
Accrued bonuses |
|
- |
|
|
|
161,362 |
|
Current portion of
long-term debt, net of fees and discount |
|
4,829,428 |
|
|
|
4,545,180 |
|
Other current
liabilities |
|
538,350 |
|
|
|
263,104 |
|
Total current
liabilities |
|
7,852,113 |
|
|
|
6,425,472 |
|
|
|
|
|
Long-term debt, net of
fees, discount and current portion |
|
- |
|
|
|
3,382,654 |
|
Derivative
instruments |
|
4,363,156 |
|
|
|
- |
|
Other long-term
liabilities |
|
20,290 |
|
|
|
174,144 |
|
Total
liabilities |
|
12,235,559 |
|
|
|
9,982,270 |
|
|
|
|
|
STOCKHOLDERS'
(DEFICIT) EQUITY |
|
|
|
Preferred stock,
7,000,000 shares authorized, zero shares issued and
outstanding |
|
- |
|
|
|
- |
|
Common stock, $0.01 par
value; 300 million shares authorized, 114,823,460 and 92,005,705
shares outstanding in 2016 and 2015, respectively |
|
1,148,235 |
|
|
|
920,057 |
|
Additional paid-in
capital |
|
182,699,484 |
|
|
|
176,002,832 |
|
Accumulated other
comprehensive income |
|
4,587 |
|
|
|
3,071 |
|
Accumulated
deficit |
|
(187,637,257 |
) |
|
|
(171,958,682 |
) |
Total
stockholders' (deficit) equity |
|
(3,784,951 |
) |
|
|
4,967,278 |
|
Total
liabilities and stockholders' (deficit) equity |
$ |
8,450,608 |
|
|
$ |
14,949,548 |
|
About Neuralstem
Neuralstem's patented technology enables the
commercial-scale production of multiple types of central nervous
system stem cells, which are being developed as potential therapies
for multiple central nervous system diseases and conditions.
Neuralstem’s technology enables the generation
of small molecule compounds by screening hippocampal stem cell
lines with its proprietary systematic chemical screening
process. The screening process has led to the discovery and
patenting of molecules that Neuralstem believes may stimulate the
brain's capacity to generate new neurons, potentially reversing
pathophysiologies associated with certain central nervous system
(CNS) conditions.
The company has completed Phase 1a and 1b trials
evaluating NSI-189, a novel neurogenic small molecule product
candidate, for the treatment of major depressive disorder or MDD,
and is currently conducting a Phase 2 efficacy study for MDD.
Neuralstem's stem cell therapy product
candidate, NSI-566, is a spinal cord-derived neural stem cell line.
Neuralstem is currently evaluating NSI-566 in three indications:
stroke, chronic spinal cord injury (cSCI), and Amyotrophic Lateral
Sclerosis (ALS).
Neuralstem is conducting a Phase 1 safety study
for the treatment of paralysis from chronic motor stroke at the
BaYi Brain Hospital in Beijing, China. In addition, NSI-566
was evaluated in a Phase 1 safety study to treat paralysis due to
chronic spinal cord injury, as well as, a Phase 1 and Phase 2a risk
escalation, safety trials for ALS. Patients from all three
indications are currently in long-term observational follow-up
periods to continue to monitor safety and possible therapeutic
benefits.
Cautionary Statement Regarding Forward Looking
Information:
This news release contains "forward-looking
statements" made pursuant to the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements relate to future, not past, events and
may often be identified by words such as "expect," "anticipate,"
"intend," "plan," "believe," "seek" or "will." Forward-looking
statements by their nature address matters that are, to different
degrees, uncertain.
Specific risks and uncertainties that could
cause our actual results to differ materially from those expressed
in our forward-looking statements include risks inherent in the
development and commercialization of potential products,
uncertainty of clinical trial results or regulatory approvals or
clearances, need for future capital, dependence upon collaborators
and maintenance of our intellectual property rights. Actual results
may differ materially from the results anticipated in these
forward-looking statements. Additional information on potential
factors that could affect our results and other risks and
uncertainties are detailed from time to time
in Neuralstem's periodic reports, including the Annual
Report on Form 10-K for the year ended December 31, 2015, and
filed with the Securities and Exchange Commission (SEC)
on March 14, 2016, Form 10-Q for the period
ended September 30, 2016, and in other reports filed with
the SEC.
Neuralstem – Investor Relations:
Danielle Spangler
301.366.1481
Planet Communications - Media Relations:
Deanne Eagle
917.837.5866
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