Brainstorm Cell Therapeutics Ltd. (Bulletin Board:BCLI) has raised a gross NIS 13 million ($3.6 million) in a private placement to private and institutional investors. The placement was made at $0.28 per share, a 29% premium on Friday's closing price of $0.39, giving a market cap of $36 million.
Brainstorm also issued warrants, with exercise prices of $0.28 and $0.50 per share, with expiration dates of one year and two years, respectively. Each warrant is exerisable for two shares. If exercised in full, the company will receive an additional $8.2 million.
The share price of the placement was the average share price in the 30 trading days preceding it.
Brainstorm says that the proceeds will finance operations through the Phase I/II clinical trial of its bone marrow stem cell-based treatment for amyotrophic lateral sclerosis (ALS or Lou Gehrig's disease), a lethal motor neuron disease. The company hopes to begin the trial in a few days.
Brainstorm's share price began climbing last month, after the company obtained orphan drug status from US Food and Drug Administration (FDA) for its ALS treatment. The status gives seven years marketing exclusivity for treatments for rare and currently incurable diseases, even if the patent on the drug expires. It also grants shortened FDA regulatory procedures.
There is only one treatment for ALS on the market, but it only extends patients' lives by a few months.
Very little is known about the mechanism of ALS. Brainstorm is making a big gamble in choosing this disease for the first test of its technology. On the other hand, due to the absence of alternative treatments, the FDA allows a fairly quick start of clinical trials, which is probably the reason for the company's choice.
Brainstorm Cell is developing treatments for diseases of the central nervous system based on bone marrow stem cells. The company's treatment for Parkinson's disease is undergoing preclinical trials on animals.
Published by Globes [online], Israel business news - www.globes-online.com - on February 28, 2011
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