BrainStorm Cell Therapeutics has responded to its failure to win approval in the time-honored fashion. Yet, while the decision to lay off 30% of its staff is classical, the biotech’s reasoning is unusual. Rather than hunker down, BrainStorm is framing the action as a way to accelerate its journey back to the FDA.
The biotech, which is no stranger to regulatory rejections, recently pulled a filing for approval of its stem cell therapy candidate, NurOwn, in amyotrophic lateral sclerosis (ALS) after the submission was savaged by the FDA and an advisory committee. Drawing on the optimism that has fueled multiple doomed bids to win approval, BrainStorm is rallying its troops for yet another run at the authorization process.
Well, not all of its troops. The biotech is parting ways with 30% of its employees, including Chief Medical Officer Kirk Taylor, M.D., to eliminate activities outside of what it will need to do to try to overcome the FDA’s reservations about the existing evidence on NurOwn. BrainStorm employed 44 people at sites in the U.S. and Israel as of the last public count.
In disclosing Taylor’s decision to step down, BrainStorm noted that his post “largely focused on leading global medical affairs and broader launch activities.” The failure to secure authorization at the third time of asking means BrainStorm has no imminent need for people working on launch activities. The biotech is also eliminating “certain other positions that are outside the current prioritized scope.”
That scope is limited to the work BrainStorm thinks can secure FDA approval of NurOwn. A double-blind, placebo-controlled phase 3b trial is the centerpiece of the strategy. BrainStorm will tack an open-label extension on to the end of the phase 3b and continue to publish biomarker, long-term safety and survival data from its earlier phase 3 study and expanded access program.
Details of the planned phase 3b are still taking shape. Before meeting the FDA, the biotech is talking to NurOwn principal investigators, ALS experts and a patient advisory group. BrainStorm needs to persuade someone to pay for the trial, too. Options proposed by the company include securing non-dilutive grants and cashing in on its exosome technology. The biotech also remains open to partnerships.
BrainStorm’s funding options reflect the investor response to the latest regulatory setback to NurOwn. Having fallen 95% in six months, the stock now trades at just 17 cents, giving BrainStorm a market cap of $7.5 million.
The biotech ended June with $75 million in cash. Laying off staff will cost $450,000 to $900,000, an outlay that BrainStorm justified on the grounds it will halve “resource consumption.”