While BrainStorm Cell Therapeutics Inc. (OTCBB: BCLI) announced on Tuesday their intention to sell 19.8 million shares of their common stock at 29 cents each, effectively raising an estimated $4.78 million, investors found little reason to ignite a buying frenzy and while trading volume has been impressive the share price of the biotechnology company has been disappointing. Having hit 0.330 yesterday shares dipped down to a low of 0.255 on Tuesday and have yet to gain any sort of momentum.
BCLI, which is developing NurOwn for the treatment of amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s Disease, a progressive neurodegenerative disease that affects nerve cells in the brain and spinal cord, has said they intend to use the proceeds raised from their offering to fund clinical trials in the United States and Israel as well as research and development and other corporate purposes.
NurOwn is BCLI’s investigative therapy that involves patients being transplanted with stem cells derived from their own bone marrow and then treated with the firm`s proprietary stem cell technology. There has been little in the way of concrete data to support the company’s efforts but they did gain some attention following a news report that highlighted the progress of an Israeli Rabbi, Refael Shmulevitz.
In that report Shmulevitz, who had been diagnosed with ALS earlier this year, was shown walking and talking again after being treated with NurOwn. Making the case of Shmulevitz all the more impressive was the fact that he had lost the ability to speak clearly and had been confined to a wheelchair prior to his treatment.
According to Professor Dimitrios Karussis of the Neurology Department at The Hadassah Medical Center in Jerusalem within a few weeks following Shmulevitz’s treatment involving the injection of BCLI’s NurOwn cells he displayed a number of improvements in functions that included breathing, speech, walking, muscular strength, and overall well-being.
Certainly this is encouraging news for BCLI but it really doesn’t do much in the way of gaining FDA approval anytime soon. There will still be the long and expensive process of navigating the clinical trial stages before BCLI sees that day and there are plenty of investors who carry doubts about that actually happening.
Even so, the FDA did grant orphan drug designation to NurOwn last year, providing financial incentives to BCLI for the development of their treatment for a rare disease, in this case ALS. Of course ALS isn’t the only target for BCLI as they noted in their most recent quarterly report that they intends to begin pre-clinical testing of Multiple Sclerosis during 2012, the only thing holding them back being money.
BCLI has said they “aim to become a leader in adult stem cell transplantation for neurodegenerative diseases. Our technology entails exploiting the patient`s own bone marrow stem cells to generate glial-like cells that may provide an effective treatment for Amyotrophic Lateral Sclerosis (“ALS”), Parkinson`s Disease (“PD”), Multiple Sclerosis (“MS”) and Spinal Cord Injury.”
To follow through with their aim BCLI is going to need success with ALS as the company is currently in a financial hole. This was detailed in their May quarterly filing in which they noted “the Company has incurred operating costs and other expenses of approximately $879,000 during the three months ended March 31, 2012, and approximately $42,301,000 for the period from inception (September 22, 2000) until March 31, 2012.”
The financial situation of BCLI is clearly a red flag for many investors but despite this there are those who remain optimistic and if the company can produce something substantial from their clinical trials then shareholders could see a nice bounce in the future, just don’t expect that in the near future.
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