On May 9, 2016 Neuralstem, Inc. (Nasdaq: CUR), a biopharmaceutical company focused on the development of central nervous system therapies based on its neural stem cell technology, reported its financial results for the three months ended March 31, 2016 and provided a business update (Press release, Neuralstem, MAY 9, 2016, View Source [SID:1234512122]).
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Business Highlights
On May 6, 2016, the Company closed a public offering resulting in net proceeds of $7.42 million. The net proceeds will be used for general corporate purposes, including the Phase 2 NSI-189 major depressive disorder (MDD) clinical trial and ongoing research and development activities.
In March 2016, we commenced the NSI-189 Phase 2 clinical trial for the treatment of Major Depressive Disorder (MDD).
In February 2016, we strengthened our management team with the appointment of Richard Daly as our President and Chief Executive Officer.
In January 2016, we announced an initiative to pursue collaborations for our stem cell therapy programs in order to utilize additional expertise, expedite clinical and regulatory pathways and secure alternative funding.
"The Company’s ability to raise significant capital from institutional investors provides us a cash runway to continue to fund our clinical development programs, specifically the NSI-189 Phase 2 MDD clinical trial," said Richard Daly, CEO. "We recently commenced our Phase 2 MDD trial which confirms the Company is on track to have results in the second half of 2017. We are committed to continue to execute our clinical and corporate strategy to create additional stakeholder value."
Small Molecule Pharmaceutical Compounds Clinical Development
Lead asset, NSI-189 Phase 2 clinical trial for the treatment of major depressive disorder (MDD)
In March 2016, we commenced our NSI-189 Phase 2 clinical trial for the treatment of MDD, a double-blind, randomized, placebo-controlled, 220 subject study. For information on the trial please visit View Source
Cell Therapy Platform Clinical Developments
In January 2016, Karl Johe, Founder and Chief Scientific Officer, presented at the Phacilitate Cell & Gene Therapy World Conference. He concluded that the collective trial data analysis showed that our proprietary neural stems cells consistently demonstrated biological activity in all three program indications: amyotrophic lateral sclerosis (ALS), chronic spinal cord injury (cSCI), and motor deficits due to ischemic stroke.
NSI-566 Phase 1 safety trial for the treatment of cSCI
In January 2016, the Company reported preliminary six-month follow-up Phase 1 safety data on all four subjects in the chronic spinal cord injury trial. The stem cell treatment demonstrated feasibility and safety. A self-reported ability to contract some muscles below the level of injury was confirmed via clinical and electrophysiological follow-up examinations in one of the four patients treated. This study was completed with the collaboration of the UCSD School of Medicine, supported by the UCSD Sanford Stem Cell Clinical Center; substantially all of the clinical costs of this study have been funded by grants arranged through the University.
NSI-566 Phase 1 and 2 safety trials for the treatment of amyotrophic lateral sclerosis (ALS)
In September 2015, nine-month Phase 2 and combined Phase 1 and Phase 2 data on the NSI-566 trial in amyotrophic lateral sclerosis (ALS) was presented at the American Neurological Association Annual Meeting by the principal investigator, Eva Feldman, MD, PhD, Director of the A. Alfred Taubman Medical Research Institute and Director of Research of the ALS Clinic at the University of Michigan Health. The data showed that the intraspinal transplantation of the cells was safe and well tolerated.
In January 2016, the Company announced that it is in discussions with various governmental, state and non-profit organizations regarding funding grants for the next trial. Initiation of the trial will be dependent upon significant funding from such sources.
NSI-566 Phase 1 safety trial for the treatment of motor deficits in stroke
During the three months ended March 31, 2016, the company completed dosing the third of three planned cohorts, each cohort included three patients, for a total of nine patients in a Phase 1 open label, dose-escalation trial evaluating safety and the maximum tolerated dose. The trial is being conducted by Neuralstem China, at BaYi Brain Hospital in Beijing, China.
Results of Operations for the Quarter Ended March 31, 2016:
Cash, cash equivalents and short-term investments on hand was approximately $7.6 million at March 31, 2015, compared to approximately $12.2 million at December 31, 2015. The decrease was primarily due to our ongoing operating expenses primarily related to preparations for the initiation of our NSI-189 Phase 2 clinical trial for the treatment of MDD.
On May 06, 2016, we closed a public offering of 20,000,000 shares of common stock and 20,000,000 common stock purchase warrants at a public offering price of $0.40 per each share and common stock purchase warrant. We received aggregate gross proceeds of $8.0 million and net proceeds of approximately $7,420,000 from the offering. Based upon our cash at March 31, 2016, and the proceeds from our May public offering, we expect to be able to fund our operations through December 31, 2016.
In the quarter ended March 31, 2016, we reported a net loss of approximately $6.6 million or $0.07 per share, compared to a loss of approximately $5.1 million or $0.06 per share in the first quarter of 2015. Our operating loss in the quarter ended March 31, 2016 was approximately $6.2 million compared to a loss of $4.6 million in the same quarter of 2015. The increase in operating loss was primarily attributable to the severance accrual and acceleration of stock based compensation expense related to the departure of our previous CEO. A decrease of approximately $0.1 million in research and development expense was offset by an increase of approximately $1.7 million in general and administrative expenses.
Research and development expenses decreased approximately $117,000 or 4% for the period ended March 31, 2016 compared to the comparable period of 2015 primarily as a result of a decrease in pre-clinical and clinical costs partially offset by an increase in headcount and stock based compensation.
General and administrative expenses increased approximately $1,737,000 or 121% for the period ended March 31, 2016 compared to the comparable period of 2015 primarily due to a severance accrual and increased stock based compensation resulting from the accelerated vesting of options, both related to the termination of our former Chief Executive Officer.
In addition, in the first quarter of 2016 we recognized approximately $0.4 million of other expenses primarily comprised of interest expenses related to our long-term debt.
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Neuralstem, Inc.
Unaudited Condensed Consolidated Balance Sheets
March 31,
2016
December 31,
2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
7,620,746
$
4,716,533
Short-term investments
–
7,517,453
Trade and other receivables
39,167
37,316
Prepaid expenses
1,077,762
1,159,782
Total current assets
8,737,675
13,431,084
Property and equipment, net
336,974
343,200
Patents, net
1,066,577
1,103,467
Other assets
57,692
71,797
Total assets
$
10,198,918
$
14,949,548
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses
$
2,627,137
$
1,455,826
Accrued bonuses
287,046
161,362
Current portion of long term debt, net of fees and discount
4,466,081
4,634,742
Other current liabilities
241,008
173,542
Total current liabilities
7,621,272
6,425,472
Long term debt, net of fees, discount and current portion
2,546,296
3,391,808
Other long term liabilities
200,739
164,990
Total liabilities
10,368,307
9,982,270
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, 7,000,000 shares authorized, zero shares issued and outstanding
–
–
Common stock, $0.01 par value; 300 million shares authorized, 92,044,042 and 92,005,705 shares outstanding in 2016 and 2015, respectively
920,440
920,057
Additional paid-in capital
177,473,335
176,002,832
Accumulated other comprehensive income
1,298
3,071
Accumulated deficit
(178,564,462)
(171,958,682)
Total stockholders’ equity (deficit)
(169,389)
4,967,278
Total liabilities and stockholders’ equity (deficit)
$
10,198,918
$
14,949,548
Neuralstem, Inc.
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss
Three Months Ended March 31,
2016
2015
Revenues
$
2,500
$
2,917
Operating expenses:
Research and development expenses
3,065,590
3,182,823
General and administrative expenses
3,170,522
1,433,074
Total operating expenses
6,236,112
4,615,897
Operating loss
(6,233,612)
(4,612,980)
Other income (expense):
Interest income
11,136
13,569
Interest expense
(386,506)
(453,734)
Other income
3,199
–
Total other income (expense)
(372,171)
(440,165)
Net loss
$
(6,605,783)
$
(5,053,145)
Net loss per share – basic and diluted
$
(0.07)
$
(0.06)
Weighted average common shares outstanding – basic and diluted
92,009,782
89,654,634
Comprehensive loss:
Net loss
$
(6,605,783)
$
(5,053,145)
Foreign currency translation adjustment
(1,773)
13
Comprehensive loss
$
(6,607,556)
$
(5,053,132)
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