Expects to Report NSI-189 Phase 2 major
depressive disorder study results in Q3 ahead
of schedule
Neuralstem, Inc. (Nasdaq:CUR), a biopharmaceutical company focused
on the development of nervous system therapies based on its neural
stem cell technology, reported its financial results for the fourth
quarter and year ended December 31, 2016.
“We are pleased with the execution over the past
year that includes securing a strategic investment, beating guided
clinical timelines and providing additional transparency to the
markets,” commented Rich Daly, Chairman and CEO. “Fiscal 2017 is
poised to be another strong year for Neuralstem as we approach our
largest milestone to date, the results of our Phase 2 major
depressive disorder (MDD) clinical study in the third
quarter. We are committed to continuing to explore NSI-189
mechanism of action (MOA) and potential therapeutic benefits in
additional indications.”
Clinical Highlights
- NSI-189 Phase 2 MDD results expected 4 months ahead of schedule
in 3Q17. Neuralstem’s Phase 2 clinical study evaluating
NSI-189 for the indication of MDD was initiated in May 2016. The
company announced 50% enrollment in September 2016 and last patient
enrolled in February 2017. 220 subjects were randomized for a
12-week interventional study with NSI-189 or placebo followed by
another 24 weeks of non-interventional observation-only study.
- NSI-189 preclinical data suggest pro-cognitive potential.
Treatment of mouse brain slices with NSI-189 produced a time- and
concentration-dependent enhancement in short-term (STP) and
long-term potentiation (LTP), an in vitro model of memory. NSI-189
treatment of brain slices from a mouse model of Angelman Syndrome,
a maternally inherited human condition that causes neurologic
impairments including cognitive deficits, was able to restore LTP
to normal levels. Furthermore, NSI-189 treatment of rats in a
radiation-induced brain injury model also ameliorated cognitive
impairment and preserved hippocampal neurogenesis.
- NSI-189 preclinical data is suggestive of the potential for
broader application in nervous system diseases. Data obtained from
studies using a rodent model of ischemic stroke demonstrate that
NSI-189 can reverse stroke-induced motor and neurological deficits,
and that this may involve upregulation of neurotrophic or
neurogenic factors. In addition, NSI-189 proved to be effective in
the prevention and reversal of peripheral neuropathies in a mouse
model of Type 1 diabetes and in the prevention of peripheral
neuropathies in a mouse model of Type 2 diabetes. Data from these
studies included reversal of neuropathic pain and decreased nerve
conductance due to diabetes.
Corporate Highlights
- Strategic investment of $20 million. In December 2016,
Neuralstem closed a strategic transaction with Tianjin
Pharmaceutical Group International Holdings Co., LTD.’s (TJPH or
Tianjin) whereby Tianjin purchased $20 million of our securities.
The transaction was announced on September 12, 2016.
- Rich Daly appointed CEO. In February 2016, Rich Daly was
appointed President and Chief Executive Officer of
Neuralstem. Subsequently in June 2016, he was appointed
Chairman of the Board of Directors. Mr. Daly has over 25
years of pharmaceutical expertise including executive leadership
roles at Takeda, AstraZeneca, Bristol-Myers Squibb and
Abbott. He serves on the board of directors of Synergy
Pharmaceuticals and Catalyst Pharmaceuticals.
- 1-for-13 reverse stock split. In January 2017, the Company
executed a 1-for-13 reverse stock split of the Company’s common
stock. The reverse stock split enabled Neuralstem to regain
compliance with the $1.00 minimum bid price condition and thereby
fulfill all of the NASDAQ Capital Market continued listing
requirements.
Financial Results for the Year Ended
December 31, 2016
Cash Position: Cash, cash
equivalents and short-term investments on hand was approximately
$20.2 million at December 31, 2016, compared to approximately $12.2
million at December 31, 2015. The increase resulted from cash
raised of approximately $28.1 million, net primarily from our
financings in May and December 2016, partially offset by use of
cash to fund our NSI-189 clinical programs and to meet our debt
repayment obligations. As of December 31, 2016 we had approximately
$3.8 million of debt outstanding as compared to $8.3 million at
December 31, 2015.
Net Loss: In the year ended
December 31, 2016, we reported a net loss of approximately $21.1
million or $2.53 per share on a split-adjusted basis, compared to a
loss of approximately $20.9 million or $2.99 per share in the year
ended December 31, 2015. Our operating loss in the year ended
December 31, 2016 was approximately $20.6 million, compared to a
loss of approximately $19.2 million in the year ended December 31,
2015.
R&D Expenses: Research and
development expenditures, at $13.2 million, increased by
approximately $0.5 million in 2016 as compared to expenditures of
$12.6 million in 2015. The increase in research and development
expenses was primarily attributable to severance payments made as a
result of our reduction in force in May together with an increase
in bonus accrual year over year, partially offset by a reduction in
ongoing payroll costs.
G&A Expenses: General and
administrative expenses increased by approximately $1.0 million
dollars to $7.4 million in the year ended December 31, 2016 as
compared to $6.5 million for the year ended December 31, 2015. The
increase was primarily attributable to an increase in legal and
professional fees associated with company financing activities,
product licensing and Nasdaq compliance efforts, and to severance
payments made as a result of our reduction in force in May together
with an increase in bonus accrual year over year, partially offset
by a reduction in ongoing payroll costs.
Equity and Reverse Stock Split:
The Board of Directors approved a 1-for-13 reverse stock split of
the Company’s common stock effective January 6, 2017.
Stockholders' equity and all references to share and per share
amounts in the accompanying consolidated financial statements have
been retroactively adjusted to reflect the 1-for-13 reverse stock
split for all periods presented.
We had 11.0 million and 7.1 million common
shares issued and outstanding on a reverse split adjusted basis and
1.0 million and 0 preferred shares issued and outstanding at
December 31, 2016 and 2015, respectively.
Liquidity: We expect that our existing cash,
cash equivalents and short-term investments will fund our
anticipated level of operations based on our current operating
plans, into the second quarter of 2018.
Neuralstem, Inc. |
|
Consolidated Balance Sheets |
|
|
December 31, |
|
|
2016 |
|
2015 |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
15,194,949 |
|
|
$ |
4,716,533 |
|
Short-term
investments |
|
|
5,000,000 |
|
|
|
7,517,453 |
|
Trade and other
receivables |
|
|
10,491 |
|
|
|
37,316 |
|
Current portion of
related party receivable, net of discount |
|
|
53,081 |
|
|
|
- |
|
Prepaid expenses |
|
|
646,195 |
|
|
|
1,159,782 |
|
Total current
assets |
|
|
20,904,716 |
|
|
|
13,431,084 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
269,557 |
|
|
|
343,200 |
|
Patents, net |
|
|
990,153 |
|
|
|
1,103,467 |
|
Related party
receivable, net of discount and current portion |
|
|
424,240 |
|
|
|
- |
|
Other assets |
|
|
15,662 |
|
|
|
71,797 |
|
Total
assets |
|
$ |
22,604,328 |
|
|
$ |
14,949,548 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses |
|
$ |
2,343,936 |
|
|
$ |
1,455,826 |
|
Accrued bonuses |
|
|
852,963 |
|
|
|
161,362 |
|
Current portion of
long-term debt, net of fees and discount |
|
|
3,705,787 |
|
|
|
4,545,180 |
|
Other current
liabilities |
|
|
430,738 |
|
|
|
263,104 |
|
Total current
liabilities |
|
|
7,333,424 |
|
|
|
6,425,472 |
|
|
|
|
|
|
|
|
|
|
Long-term debt, net of
fees, discount and current portion |
|
|
- |
|
|
|
3,382,654 |
|
Derivative
instruments |
|
|
3,921,917 |
|
|
|
- |
|
Other long term
liabilities |
|
|
18,209 |
|
|
|
174,144 |
|
Total
liabilities |
|
|
11,273,550 |
|
|
|
9,982,270 |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
Preferred stock,
7,000,000 shares authorized, $0.01 par value; 1,000,000 and 0
shares issued and outstanding at December 31, 2016 and 2015,
respectively |
|
|
10,000 |
|
|
|
- |
|
Common stock, $0.01 par
value; 300 million shares authorized, 11,032,858 and 7,077,362
shares issued and outstanding in 2016 and 2015, respectively |
|
|
110,329 |
|
|
|
70,774 |
|
Additional paid-in
capital |
|
|
204,239,837 |
|
|
|
176,852,115 |
|
Accumulated other
comprehensive income |
|
|
3,905 |
|
|
|
3,071 |
|
Accumulated
deficit |
|
|
(193,033,293 |
) |
|
|
(171,958,682 |
) |
Total
stockholders' equity |
|
|
11,330,778 |
|
|
|
4,967,278 |
|
Total
liabilities and stockholders' equity |
|
$ |
22,604,328 |
|
|
$ |
14,949,548 |
|
|
|
|
|
|
|
|
|
|
Neuralstem, Inc. |
|
Consolidated Statements of Operations and
Comprehensive Loss |
|
|
|
Year Ended December 31, |
|
|
2016 |
|
2015 |
|
|
|
|
|
Revenues |
|
$ |
16,246 |
|
|
$ |
10,417 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and
development costs |
|
|
13,155,887 |
|
|
|
12,637,278 |
|
General and
administrative expenses |
|
|
7,497,202 |
|
|
|
6,529,667 |
|
Total operating
expenses |
|
|
20,653,089 |
|
|
|
19,166,945 |
|
Operating loss |
|
|
(20,636,843 |
) |
|
|
(19,156,528 |
) |
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
Interest income |
|
|
58,835 |
|
|
|
69,549 |
|
Interest expense |
|
|
(1,141,297 |
) |
|
|
(1,816,206 |
) |
Gain on related party
settlement |
|
|
458,608 |
|
|
|
- |
|
Gain from change in
fair value of derivative instruments |
|
|
660,253 |
|
|
|
- |
|
Fees related to
issuance of derivative instruments and other expenses |
|
|
(474,167 |
) |
|
|
(716 |
) |
Total other income
(expense) |
|
|
(437,768 |
) |
|
|
(1,747,373 |
) |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(21,074,611 |
) |
|
$ |
(20,903,901 |
) |
|
|
|
|
|
|
|
|
|
Net loss per common
share - basic and diluted |
|
$ |
(2.53 |
) |
|
$ |
(2.99 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding - basic and diluted |
|
|
8,345,992 |
|
|
|
6,989,764 |
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(21,074,611 |
) |
|
$ |
(20,903,901 |
) |
Foreign currency
translation adjustment |
|
|
834 |
|
|
|
(2,929 |
) |
Comprehensive loss |
|
$ |
(21,073,777 |
) |
|
$ |
(20,906,830 |
) |
|
|
|
|
|
|
|
|
|
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 (CNS) diseases and
conditions.
Neuralstem’s technology enables the discovery of
small molecule compounds by systematic screening of chemical
compounds against its proprietary human hippocampal stem cell
line. 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 and peripheral
nervous system conditions.
The company has completed Phase 1a and 1b
studies 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. Subjects from all three
indications are currently in long-term observational follow-up
periods and continued to be monitored for 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, 2016, filed with the Securities and
Exchange Commission (SEC) on March 23, 2017, and in other reports
filed with the SEC. We do not assume any obligation to update any
forward-looking statements.
Contact:
Neuralstem – Investor Relations:
Danielle Spangler
301.366.1481
Lori Rosen
Public Relations
LDR Communications
917.553.6808
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