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Thursday, July 26, 2012

Hope In Neurodegenerative Diseases

By Jason Napodano, CFA

Last month we published a NOTE outlining the pioneering efforts of Neuralstem (CUR:NYSEMKT) in the use of human neural stem cells ("hNSC") for the treatment of central nervous system diseases and neurodegenerative disorders. Neuralstem’s lead development program is for Amyotrophic Lateral Sclerosis (ALS), also known as Lou Gehrig’s disease, named after the famous New York Yankee first baseman who was diagnosed with the disease in 1939, and passed in 1941 at the age of only 37.

On July 17, 2012, StemCells Inc. (STEM:NASDAQCM) announced preclinical data demonstrating that its proprietary version of human neural stem cells restored memory and enhanced synaptic function in two animal models relevant to Alzheimer's disease (AD). The data was presented at the Alzheimer's Association International Conference 2012 in Vancouver, Canada, and show that transplanting cells into the hippocampus statistically increased memory in two different animal models. 

The animal models tested immunosuppressed triple transgenic (3xTg) AD mice and CaM/Tet-DT mice receiving hippocampal transplants of human central nervous system stem cells (HuCNS-SC) after one-month of transplantation. Mice were tested on a battery of behavioral tasks followed by histological and biochemical analysis. Results show that hippocampal transplantation of HuCNS-SC improves cognition in both models assessed by the Morris Water Maze, improves context-dependent object recognition, and place recognition versus vehicle-injected (placebo) mice. Evidence of increased presynaptic terminals in HuCNS-SC-injected mice was also noted.

3xTg-AD Mice
Cam/Tet-DT Mice
The hippocampus is critically important to the control of memory and is severely impacted by the pathology of AD. Specifically, hippocampal synaptic density is reduced in AD and correlates with memory loss. Cam/Tet-DT mice mimic the substantial loss of hippocampal neurons that occur in advanced AD. StemCells Inc's data shows that one month after transplantation, HcCNS-SC engraft, migrate locally, and have begun to differentiate into neuronal and glial lineages in both models. 

This resulted in observed increased synaptic density and improved memory post transplantation. Importantly, these results did not require reduction in beta amyloid or tau that accumulate in the brains of patients with AD and account for the pathological hallmarks of the disease, suggesting a new mechanism of action for the treatment of AD.

We think the data above presented by StemCells Inc. is interesting, and bodes well for Neuralstem's similar efforts focusing on hippocampal atrophy in neurodegenerative diseases. The different between StemCells Inc. and Neuralstem is that management at Neuralstem is attempting to recreate these highly encouraging results, only with a small molecule, NS-189, that the company discovered while testing preclinical candidates on stable neural stem cells lines derived from the human hippocampus.

NS-189 is Neuralstem's patent protected small molecule that has demonstrated evidence of increased hippocampal volume in preclinical animal studies. Management at Neuralstem is currently testing NS-189 in a phase Ib trial patients with major depressive disorder (MDD). 

A new hypothesis on major depressive disorder, implicates brain physiology rather than brain chemistry alone on disease progression. For example, research shows that depressed patients have reduced hippocampal volume. Accordingly, shrunken hippocampal volume observed in depressed patients could be attributable to a reduction in normal new neuronal generation and/or atrophying hippocampal neural stem cells.

We are expecting data from Neuralstem's phase 1b program in MDD around November / December 2012. If successful, we expect the company to move into a phase 2 program for MDD with a larger pharmaceutical partner. And, because safety for NS-189 would have been established in the phase 1 MDD program, Neuralstem can move quickly into testing the compound on patients with AD. The company previously completed a 41-patient phase 1a program in October 2011.

Back to Neuralstem's efforts in human spinal cord neural stem cells (hNSC) for the treatment of ALS, the company announced earlier in the week that the 17th patient has been successfully treated in the ongoing phase 1 trial. We remind investors that the phase 1 trial is designed to assess the safety of the cells via intraspinal transplantation in ALS patients. The trial is designed to enroll up to 18 patients total and concludes six months after the final surgery.

The first 12 patients were each transplanted in the lumbar (lower back) region of the spine, beginning with non-ambulatory and advancing to ambulatory cohorts. The trial then advanced to transplantation in the cervical (upper back) region of the spine. The first cohort of three was treated in the cervical region only. The current cohort of three is receiving injections in both the cervical and lumbar regions of the spinal cord. In an amendment to the trial design, the FDA approved the return of previously treated patients to this cohort. Results from the first twelve patients were presented at the American Neurological Association annual meeting in September 2011 (ANA-Poster). Data has since been e-published in Stem Cells, in March 2012 (10.1002/Stem.1079). 

We are confident in the safety of the program. We point investors to recent news out of BrainStrom Cell Therapeutics (BCLI:OTCQB) noting is has completed a planned interim safety review of its phase 1/2 ALS clinical trial indicating that autologous transplantation of the company's cell therapy was well-tolerated, appears to be safe for use, and did not present any undue risks to the study participants.
The trial, which is designed to evaluate the safety and preliminary efficacy of BrainStorm's proprietary NurOwn cell therapy (bone marrow-derived, autologous, differentiated mesenchymal stromal cells) is being conducted at the Hadassah Medical Center in Jerusalem, Israel. The company submitted the positive interim safety report to the Israeli Ministry of Health. NurOwn has been granted Orphan-Drug designation by the U.S. FDA.

One final piece of news for investors in this space, we note that Neuralstem received a notice of issuance for patent number 12/710,097 titled: "Transplantation of Human Neural Cells for Treatment of Neurodegenerative Conditions" on July 27, 2012. The patent covers both the culturing of central nervous system cells as well as their transplantation into spinal cord tissue to treat neurodegenerative conditions, including ALS. The patent does not expire until the first quarter of 2030.

For additional information on Neuralstem, please download our full research report: CUR/5.14.2012/Napodano.PDF or visit our website at

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