BrainStorm's ALS Therapy Fails Trial, Seeks FDA Approval

From $4 to $17 and a trial that missed the mark

The most promising ALS therapy in years fell just short of statistical success. BrainStorm Therapeutics, an Israeli biotech developing the NurOwn platform using mesenchymal stem cells, reported preliminary results from its Phase III trial for amyotrophic lateral sclerosis (ALS) that did not achieve statistical significance. The miss stings more given the recent rally: the stock jumped from $4 to nearly $17 in months, hitting stops at 6.33, 13.5, and 14.5. Early buyers who sold high made money. Those waiting for accelerated approval are still waiting.

What is NurOwn and how does it aim to slow ALS?

The procedure isn't a standard chemical drug. Mesenchymal stem cells are extracted from the patient, selected for their anti-inflammatory and neuroprotective capabilities, multiplied in the lab, and re-injected. The commercial thesis was simple: while the patient receives treatment, ALS or multiple sclerosis (MS) pogre halts or slows significantly.

The technical nuance matters and was emphasized repeatedly. NurOwn does not create new motor neurons: it keeps existing ones alive and rescues those under stress. Therefore, improvement isn't cumulative, and patients need periodic doses. It’s not a cure; it’s a brake. And the difference between braking and curing is, in market terms, the difference between $4 and $20.

Why did the stock jump from $4 to $17?

Catalysts piled up. Hiring a veteran executive from Biogen as global head of clinical research fueled rumors of licensing or acquisition by a major pharma firm: the company is too small to manufacture and distribute the treatment globally. This was compounded by patient pressure, with protests outside the White House demanding early approval, and legislative pathways for conditional approval.

Numbers were on the table. A Phase III company targeting a disease with no available treatment was valued, according to circulating calculations, between $400 million and $1 billion in market cap, depending on how the market perceived the trial's success.

The other side has a ten-year history. Peaks of $8.10 in June 2011 and $7.50 in December 2014 eventually sent the price back to square one. The skeptical diagnosis was damning and not without reason: revolutionary prototype, hype, silence, failure to pass the corresponding phase, and the ticket becomes worthless. Money in such companies, it was argued, comes from those chasing quick gains with more enthusiasm than information.

The Phase III trial: what do the results say exactly?

Preliminary data did not reach statistical significance on the primary endpoint. But the company’s release offered an alternative reading: in the pre-specified subgroup of early-stage disease, NurOwn showed a clinically relevant response. That is, newly diagnosed patients slowed pogre appreciably compared to placebo.

The problem is economic before scientific. NurOwn is expensive to manufacture and administer, personalized for each patient. If it were cheap and easy to produce, these data might have secured US regulatory agency approval without debate. With these data and this cost, approval is far from guaranteed.

Expanded Access: the signal that did come from the FDA

The company announced an expanded access program for participants in the Phase III trial. The detail has regulatory relevance: offering it requires FDA authorization, and obtaining it implies the agency is reviewing the file favorably, for now.

The other leg is multiple sclerosis. Phase II results in pogre MS were positive: demonstrated safety and preliminary evidence of efficacy, with biomarker analyses showing consistent effects on neuroinflammation and neuroprotection pathways. The company also stated its intention to request FDA approval for ALS therapy, convinced it has sufficient information for certain patient profiles. A meeting with the regulator is set for September 27, and the final decision could be known by year-end.

What can happen now with the stock?

The bullish scenario rests on three pieces: granted expanded access, good MS data, and a possible global commercial partner whose terms, according to presentations, are well advanced. Any announcement of that type would move the price before the regulatory verdict is known.

The pessimistic view relies on what sank the quote in October: an expensive product, an indication with weak statistical results, and an agency that doesn’t usually reward uncertainty. In between lies the clinical reading, the only one independent of the market: there are patients reporting mobility improvements while receiving treatment, and trial participants who will continue receiving it via expanded access, and that, with zero approved alternatives, remains the hardest fact to dispute.

At this stage, it is reasonable to neither consider approval dead nor the recovery assured. The FDA decision and the commercial partner announcement are the two remaining switches. If both arrive, those who held on will be right; if only one arrives, it depends on the order. And if neither arrives, the MS data remain for another attempt.