Neuralstem, Inc. (NASDAQ:CUR) reported its financial results and provided business and clinical updates for the three and nine month periods ended September 30, 2016.
“This is an exciting time for Neuralstem, as we successfully continue to execute the new operational and clinical development strategy that was implemented in the beginning of the year,” commentedRich Daly, Chief Executive Officer. “The recent announcement of the $20 million strategic investment from Tianjin Pharmaceutical Holdings Co., Ltd. provides credibility for our technology and a healthy financial runway through 2017. Furthermore, we reached 50% enrollment for our NSI-189 Phase 2 study in major depressive disorder ahead of schedule, maintaining expected data results in the second half of 2017.”
Recent Business and Clinical Highlights
- In May 2016, we enrolled the first subject in our NSI-189 Phase 2 clinical trial for the treatment of major depressive disorder (MDD).
- In June 2016, we announced new NSI-189 preclinical data showing enhancement of mouse long term potentiation (LTP), an in vitro biomarker of memory by NSI-189 in a concentration-dependent and time-dependent manner. We believe that this study not only suggests the cognition enhancing potential of NSI-189, but also contributes toward the understanding of its mechanism of action.
- In September 2016, we entered into a definitive agreement with Tianjin Pharmaceutical Holdings Co., Ltd. for a private placement of common stock and convertible preferred stock for gross proceeds of $20 million. This agreement is expected to close in the fourth quarter of 2016.
- In September 2016, we achieved 50% enrollment in our Phase 2 clinical trial evaluating NSI-189 for the treatment of major depressive disorder (MDD).
- In September 2016, we presented preclinical data which showed that NSI-189 was effective in the prevention and reversal of diabetic neuropathies in Type 1 and Type 2 diabetic mouse models.
- In October 2016, we presented preclinical data which showed NSI-189’s ability to ameliorate radiation-induced cognitive impairment and to protect hippocampal neurogenesis in a mouse model of brain injury due to radiation therapy of brain cancers.
Results of Operations for the Third Quarter 2016
Research and Development expenses increased approximately $198,000 or 6% for the three months ended September 30, 2016 compared to the comparable period of 2015. This was primarily attributable to increased spending on clinical trials associated with our on-going Phase 2 MDD study, partially offset by salary and benefits saving associated with our reduction-in-force in May and reduced manufacturing expenses.
General and Administrative expenses decreased approximately $478,000 or 26% for the three months ended September 30, 2016 compared to the comparable period of 2015. This was primarily due to a reduction in salaries, benefits and consulting expenses as a result of our May 2016reduction-in-force.
Other expenses, net totaled approximately $303,000 and $440,000 for the three months endedSeptember 30, 2016 and 2015, respectively. Other expense, net in 2016 consisted of approximately$538,000 of losses related to the fair value adjustment of our derivative instruments and $240,000 of interest expense primarily related to our long-term debt, partially offset by a gain of approximately$459,000 related to our entering into a reimbursement agreement with a former executive officer.
Other expenses, net in 2015 consisted primarily of approximately $464,000 of interest expense principally related to our long-term debt partially offset by approximately $24,000 in interest income.
Results of Operations for the Nine Months Ended September 30, 2016
Research and Development expenses decreased approximately $758,000 or 8% for the nine months ended September 30, 2016 compared to the comparable period of 2015. This was primarily attributable to a decrease in manufacturing costs associated with producing clinical supplies of NSI-189 partially offset by an increase in pre-clinical and clinical trial expenses related to the initiation of our Phase 2 MDD study.
General and Administrative expenses increased approximately $937,000 or 19% for the nine months ended September 30, 2016 compared to the comparable period of 2015. This was primarily due to a severance accrual and increased non-cash stock based compensation resulting from the accelerated vesting of options, both related to the resignation of our former Chief Executive Officer coupled with non-cash stock based compensation expense resulting from grants to our new Chief Executive Officer which were partially offset by a decrease in our employee bonus expense.
Other expenses, net totaled approximately $694,000 and $1,334,000 for the nine months endedSeptember 30, 2016 and 2015, respectively. Other expense, net in 2016 consisted of approximately$949,000 of interest expense primarily related to our long-term debt and $464,000 of fees related to the issuance of our derivative instruments, partially offset by a gain of approximately $459,000related to our entering into a reimbursement agreement with a former executive officer of the Company and $219,000 of gain related to the change in the fair value adjustment of our derivative instruments.
Other expenses, net in the nine months ended September 30, 2015 consisted primarily of approximately $1,377,000 of interest expense principally related to our long-term debt partially offset by approximately $54,000 in interest income. (Original Source)
Shares of Neuralstem closed yesterday at $0.246, up $0.01 or 6.45%. CUR has a 1-year high of $1.20 and a 1-year low of $0.19. The stock’s 50-day moving average is $0.31 and its 200-day moving average is $0.31.
On the ratings front, Neuralstem has been the subject of a number of recent research reports. In a report issued on October 4, Aegis Capital Corp. analyst Jason Wittes reiterated a Buy rating on CUR, with a price target of $4, which represents a potential upside of 1527% from where the stock is currently trading. Separately, on September 20, Roth Capital’s Joseph Pantginis maintained a Buy rating on the stock and has a price target of $1.20.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jason Wittes and Joseph Pantginis have a yearly average return of 2.4% and a loss of 14.6% respectively. Wittes has a success rate of 47% and is ranked #1007 out of 4181 analysts, while Pantginis has a success rate of 30% and is ranked #4046.
Neuralstem, Inc. is a biopharmaceutical company, which is focused on the research, development and commercialization of central nervous system therapies based on human neuronal stem cells and small molecule compounds. Its patented technology enables the commercial-scale production of multiple types of central nervous system stem cells, which are under development for the potential treatment of central nervous system diseases and conditions.