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 three
and nine month periods ended September 30,
2017.
“We continue to evaluate the full Phase 2 data set for NSI-189
to determine the optimal development path in major depressive
disorder and for other conditions, including Angelman’s Syndrome
following highly encouraging preclinical data in that
setting. We expect to provide a detailed update on our
corporate strategy, including development and regulatory plans,
after our post-phase 2 meeting with the FDA in the first half of
2018,” commented Rich Daly, Chairman and CEO.
“Our recent financing has further extended the company’s cash
runway to sufficiently support continued research on NSI-189 and to
support operations. We are encouraged by the emerging clinical
profile of NSI-189 and look forward to presenting additional
clinical data at the upcoming American College of
Neuropsychopharmacology in December.”
Recent Corporate & Clinical Highlights &
Milestones
- On November 6, 2017, we strengthened our clinical research team
with the appointment of David Recker, MD, as Chief Medical Officer.
Dr. Recker has more than 20 years of experience in drug development
in multiple therapeutic areas including CNS and cell therapy and
has been involved in numerous aspects of clinical strategy
development, including product registration and marketing support,
clinical trial development and execution, data interpretation, key
opinion leader development and support.
- On September 18, 2017, Cristina Csimma, Pharm.D, MHP joined the
board of directors. Ms. Csimma brings extensive senior leadership
experience in the biopharmaceutical industry, including expertise
in drug development and regulatory and commercial processes.
- On July 25, 2017, the Company announced top-line results from
the exploratory Phase 2 clinical trial examining the efficacy of
NSI-189 at 40 mg once daily (QD) and 40 mg twice daily (BID)
compared to placebo for the treatment of major depressive disorder
(MDD). The study, which utilized the two-staged sequential
parallel comparison design (SPCD), did not meet its primary
efficacy endpoint of a statistically significant reduction in
depression symptoms on the Montgomery-Asberg Depression Rating
Scale (MADRS). However, as reported in our topline results,
the 40 mg QD dose was directionally positive on the MADRS and met
statistical significance on several key secondary efficacy
endpoints.
- The company plans to present the results of the analysis of the
secondary endpoints from the Phase 2 clinical trial of NSI-189 in
MDD at a scientific meeting in the fourth quarter of this year.
- Neuralstem plans to meet with the U.S. Food and Drug
Administration in the first half of 2018 to discuss the clinical
development path for NSI-189.
- Neuralstem intends to submit data on NSI-566, its stem cell
therapy product candidate, to FDA and to request Regenerative
Medicine Advanced Technology, or RMAT, designation. The RMAT
designation, intended to expedite the approval of safe and
effective cell therapies, was created by the U.S. Congress as part
of the recently-enacted 21st Century Cures Act. Neuralstem is
evaluating NSI-566 in three indications: stroke, chronic spinal
cord injury (cSCI), and Amyotrophic Lateral Sclerosis
(ALS).
- On September 5, 2017, the Company was awarded two additional
patents by the United States Patent and Trademark Office
(USPTO). These patents broadly protect methods for using
neural stem cells to treat neurodegenerative disorders, a key
component of the Company’s platform. The first new patent,
U.S. Patent No. 9,744,194, covers methods of treating
neurodegenerative disorders through transplantation of neural stem
cells. The second new patent, U.S. Patent No. 9,750,769,
covers neural stem cells engineered to express IGF-1, a
neurotrophic molecule with broad therapeutic potential in the
treatment of neurodegenerative disorders.
Financial Results for the Third Quarter Ended September
30, 2017
Cash Position and Liquidity: At September
30, 2017, cash and investments was $14.1 million as compared to
$11.4 million at June 30, 2017. The $2.6 million increase is
due to proceeds of $5.4 million, net, from a public offering of
common stock and warrants. On August 1, 2017, the Company closed a
public offering of 3,000,000 shares of common stock and 2,250,000
common stock purchase warrants at a public purchase price of $2.00
per share and accompanying warrant. Gross proceeds were $6.0
million and approximately $5.4 million, net.
Operating Loss: Operating loss for the quarter
ended September 30, 2017 was $2.6 million compared to a loss of
$4.9 million for the same period of 2016. The decrease in
operating loss for the third quarter 2017 was primarily due to a
decrease in clinical trial expenses related to the completion of
the Phase 2 clinical trial of NSI-189 in MDD coupled with ongoing
corporate restructuring and cost reduction efforts.
Operating loss for the nine months ended September 30, 2017 was
$11.0 million compared to a loss of $15.0 million for the same
period of 2016. The decrease in operating loss for the
nine-month period was primarily due to ongoing corporate
restructuring and cost reduction efforts partially offset by
increases in clinical trial expenses as the Company completed the
Phase 2 clinical trial of NSI-189.
Net Loss: Net loss for the quarter ended
September 30, 2017 was $0.1 million, or $0.01 per share (basic)
compared to a loss of $5.2 million, or $0.59 per share (basic), on
a split adjusted basis for the same period of 2016. The
decrease in net loss was primarily due to a decrease in operating
expenses along with a $2.7 million non-cash, gain resulting from
the fair value adjustment of outstanding liability classified stock
purchase warrants.
Net loss for the nine months ended September 30, 2017 was $12.4
million, or $1.00 per share (basic), compared to a loss of $15.7
million, or $1.96 per share (basic), on a split adjusted basis for
the same period of 2016. The decrease in net loss was
primarily due to a decrease in operating expenses and interest
expense due to the maturity of long-term debt in April 2017.
R&D Expenses: The $2.2 million, or 61%
decrease, in research and development expenses for the quarter
ended September 30, 2017, as compared to the comparable period of
2016, was primarily attributable to a $1.7 million decrease in
clinical trial expenses due to the completion of NSI-189 Phase 2
clinical trial, a $0.3 million decrease in personnel, facility and
other expenses related to ongoing corporate restructuring and cost
reduction efforts and a $0.2 million decrease in non-cash stock
based compensation expense.
The $2.3 million, or 25% decrease, in research and development
expenses for the nine months ended September 30, 2017, as compared
to the comparable period of 2016, was primarily attributable to a
$2.2 million decrease in personnel, facility and other expenses
related to ongoing corporate restructuring and cost reduction
efforts and a $0.4 million decrease in non-cash stock based
compensation expense partially offset by a $0.3 million increase in
clinical trial expenses related to the completion of the Phase 2
clinical trial of NSI-189.
G&A Expenses: The $0.1 million, or 9%
decrease, in general and administrative expenses for the quarter
ended September 30, 2017, as compared to the comparable period of
2016, was primarily attributable to a decrease in cash based board
of directors fees.
The $1.7 million, or 29% decrease, in general and administrative
expenses for the nine months ended September 30, 2017 as compared
to the comparable period of 2016 was primarily attributable to a
$1.0 million decrease in non-cash stock based compensation expense
coupled with a $0.8 million decrease in personnel related expense
as a result of headcount reductions.
Unaudited Condensed Consolidated Balance
Sheets |
|
|
|
|
|
September 30, 2017 |
|
December 31, 2016 |
|
|
|
|
ASSETS |
|
|
|
CURRENT
ASSETS |
|
|
|
Cash and cash
equivalents |
$ |
9,063,710 |
|
|
$ |
15,194,949 |
|
Short-term
investments |
|
5,000,000 |
|
|
|
5,000,000 |
|
Trade and other
receivables |
|
37,458 |
|
|
|
10,491 |
|
Current portion of
related party receivable, net of discount |
|
57,291 |
|
|
|
53,081 |
|
Prepaid expenses |
|
548,766 |
|
|
|
646,195 |
|
Total current
assets |
|
14,707,225 |
|
|
|
20,904,716 |
|
|
|
|
|
Property and equipment,
net |
|
196,191 |
|
|
|
269,557 |
|
Patents, net |
|
915,457 |
|
|
|
990,153 |
|
Related party
receivable, net of discount and current portion |
|
356,174 |
|
|
|
424,240 |
|
Other assets |
|
13,719 |
|
|
|
15,662 |
|
Total
assets |
$ |
16,188,766 |
|
|
$ |
22,604,328 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
CURRENT
LIABILITIES |
|
|
|
Accounts payable and
accrued expenses |
$ |
1,476,683 |
|
|
$ |
2,343,936 |
|
Accrued bonuses |
|
- |
|
|
|
852,963 |
|
Current portion of
long-term debt, net of fees and discount |
|
- |
|
|
|
3,705,787 |
|
Other current
liabilities |
|
358,044 |
|
|
|
430,738 |
|
Total current
liabilities |
|
1,834,727 |
|
|
|
7,333,424 |
|
|
|
|
|
Derivative
liabilities |
|
2,785,863 |
|
|
|
3,921,917 |
|
Other long-term
liabilities |
|
3,400 |
|
|
|
18,209 |
|
Total
liabilities |
|
4,623,990 |
|
|
|
11,273,550 |
|
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
Convertible preferred
stock, 7,000,000 shares authorized, $0.01 par value;
1,000,000 shares issued and outstanding at September 30, 2017
and December 31, 2016, respectively |
|
10,000 |
|
|
|
10,000 |
|
Common stock, $0.01 par
value; 300 million shares authorized, 15,146,027 and 11,032,858
shares issued and outstanding at September 30, 2017 and December
31, 2016, respectively |
|
151,460 |
|
|
|
110,329 |
|
Additional paid-in
capital |
|
216,784,493 |
|
|
|
204,239,837 |
|
Accumulated other
comprehensive income |
|
2,345 |
|
|
|
3,905 |
|
Accumulated
deficit |
|
(205,383,522 |
) |
|
|
(193,033,293 |
) |
Total
stockholders' equity |
|
11,564,776 |
|
|
|
11,330,778 |
|
Total
liabilities and stockholders' equity |
$ |
16,188,766 |
|
|
$ |
22,604,328 |
|
Neuralstem, Inc. |
|
|
Unaudited Condensed Consolidated Statements of
Operations and Comprehensive Loss |
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
2,500 |
|
|
$ |
2,500 |
|
|
$ |
7,500 |
|
|
$ |
7,500 |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and
development expenses |
|
1,383,863 |
|
|
|
3,589,793 |
|
|
|
6,871,028 |
|
|
|
9,130,012 |
|
|
General and
administrative expenses |
|
1,206,510 |
|
|
|
1,329,712 |
|
|
|
4,174,583 |
|
|
|
5,862,374 |
|
|
Total operating
expenses |
|
2,590,373 |
|
|
|
4,919,505 |
|
|
|
11,045,611 |
|
|
|
14,992,386 |
|
|
Operating loss |
|
(2,587,873 |
) |
|
|
(4,917,005 |
) |
|
|
(11,038,111 |
) |
|
|
(14,984,886 |
) |
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
Interest income |
|
18,099 |
|
|
|
17,293 |
|
|
|
52,995 |
|
|
|
41,862 |
|
|
Interest expense |
|
(1,383 |
) |
|
|
(240,462 |
) |
|
|
(155,843 |
) |
|
|
(949,375 |
) |
|
Change in fair value of
derivative instruments |
|
2,679,770 |
|
|
|
(538,261 |
) |
|
|
(403,155 |
) |
|
|
219,014 |
|
|
Gain on related party
settlement |
|
- |
|
|
|
458,608 |
|
|
|
- |
|
|
|
458,608 |
|
|
Fees related to
issuance of derivative liabilities, warrant inducement and other
expenses |
|
(242,396 |
) |
|
|
(456 |
) |
|
|
(806,115 |
) |
|
|
(463,798 |
) |
|
Total other income
(expense) |
|
2,454,090 |
|
|
|
(303,278 |
) |
|
|
(1,312,118 |
) |
|
|
(693,689 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(133,783 |
) |
|
$ |
(5,220,283 |
) |
|
$ |
(12,350,229 |
) |
|
$ |
(15,678,575 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss per share -
basic |
$ |
(0.01 |
) |
|
$ |
(0.59 |
) |
|
$ |
(1.00 |
) |
|
$ |
(1.96 |
) |
|
Net loss per share -
diluted |
$ |
(0.18 |
) |
|
$ |
(0.59 |
) |
|
$ |
(1.00 |
) |
|
$ |
(1.96 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding - basic |
|
14,060,844 |
|
|
|
8,835,045 |
|
|
|
12,380,054 |
|
|
|
8,019,153 |
|
|
Weighted average common
shares outstanding - diluted |
|
14,163,072 |
|
|
|
8,835,045 |
|
|
|
12,380,054 |
|
|
|
8,019,153 |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss: |
|
|
|
|
|
|
|
|
Net loss |
$ |
(133,783 |
) |
|
$ |
(5,220,283 |
) |
|
$ |
(12,350,229 |
) |
|
$ |
(15,678,575 |
) |
|
Foreign currency
translation adjustment |
|
(1,005 |
) |
|
|
21 |
|
|
|
(1,560 |
) |
|
|
1,516 |
|
|
Comprehensive loss |
$ |
(134,788 |
) |
|
$ |
(5,220,262 |
) |
|
$ |
(12,351,789 |
) |
|
$ |
(15,677,059 |
) |
|
About NeuralstemNeuralstem is a clinical-stage
biopharmaceutical company developing novel treatments for nervous
system diseases of high unmet medical need. NSI-189 is a
small molecule in clinical development for major depressive
disorder (MDD) and in preclinical development for Angelman
syndrome, irradiation-induced cognitive impairment, Type 1 and Type
2 diabetes, and stroke.
NSI-566 is a stem cell therapy being tested for treatment of
paralysis in stroke, chronic spinal cord injury (cSCI) and
Amyotrophic Lateral Sclerosis (ALS). Neuralstem’s diversified
portfolio of product candidates is based on its proprietary neural
stem cell technology.
Cautionary Statement Regarding Forward Looking
InformationThis 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, and Form 10-Q for the three and nine
months ended September 30, 2017, filed with the Securities and
Exchange Commission (SEC), and in other reports filed with the SEC.
We do not assume any obligation to update any forward-looking
statements.
Contact:Kimberly MinarovichArgot Partners (Investor
Relations)212-600-1902kimberly@argotpartners.com
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