Updated: Short-Term Penny Stock Trade With Potential For Nice Profits Print E-mail
By M.E.Garza   
Tuesday, 17 July 2012 10:00
icon_tradecatalystThis morning, BrainStorm Cell Therapeutics Inc. (OTCBB:BCLI) announced the financing our readers had been anticipating. With net proceeds to BrainStorm of approximately $4.78 million. The next pending catalyst could send shares of the company higher.

As we told our premium subscribers this weekend, shares of the emerging Israeli firm had started to gain momentum earlier this month, after a televised news report  highlighted the case of a very conservative Israeli Rabbi named Refael Shmulevitz.

According to various reports on the subject, Israeli Channel Two audiences were moved to see the ailing rabbi, who had been diagnosed with ALS, able to walk and talk again after being treated with Brainstorm‘s investigative therapy, NurOwn. Brainstorm's patients are transplanted with stem cells derived from their own bone marrow and then treated with the firm's proprietary stem cell technology.

Amyotrophic lateral sclerosis, or ALS, is a disease of the nerve cells in the brain and spinal cord that control voluntary muscle movement. ALS is also known here in the U.S. as Lou Gehrig's disease.

By all accounts, Rabbi Shmulevitz was diagnosed with ALS four months ago at the Mayo Clinic and was told he had only two to four years to live. He lost the ability to talk clearly and was confined to a wheelchair. He stopped speaking publicly and, basically, retired from most of his sctivities. Within a few weeks following injection with BCLI's NurOwn cells, the patient showed dramatic improvement in a variety of functions including breathing, speech, walking, muscular strength, and overall well-being according to Professor Dimitrios Karussis of the Neurology Department at The Hadassah Medical Center in Jerusalem. Karussis is the principal investigator of BrainStorm’s current phase I/II clinical trial.

“While we cannot draw scientific conclusions based on the outcome of an individual patient, these results are extremely encouraging,” Karussis added.

BrainStorm is a company that we have been actively tracking for at least six months. Still, I could not find logical reason to recommend the firm as a trade or investment candidate until now. Don't get me wrong, I was very bullish on the firm after carefully reading through clinical data results which were released in January 2012, but we knew there was more to this story and we could not, in good faith, recommend the firm at that time.  It was reported at that time, that even though the firm was only conducting a "safety trial," the early clinical follow up of the patients treated with the stem cells showed indications of beneficial clinical effects, such as "an improvement in breathing and swallowing ability as well as in muscular power."

A month later, in February 2011, the U.S. Food and Drug Administration ("FDA") granted Orphan Drug designation to NurOwn, the firm's autologous adult stem cell product candidate for the treatment of ALS.

Last month, in June 2011, BrainStorm initiated a Phase I/II clinical trial for the treatment of ALS with NurOwn at the Hadassah University Medical Center's in Jerusalem, after receiving approval from the Israeli Ministry of Health ("MoH"). BrainStorm is the first company to receive clearance from the MoH to carry out a differentiated stem-cell based therapeutic clinical trial in Israel. The Company's production process for manufacturing clinical grade MSC-NTF cells is in full compliance with Good Manufacturing Practice ("GMP") requirements.

Video: Muhammad Ali's Daugher Excited About BCLI's Work

Brainstorm Cell Therapeutics Inc... An End to ALS?

BrainStorm’s NurOwn™ Stem Cell Technology Shows Promise

The firm also recently announced that they had received the first installment of a $1.3 Million NIS Grant from Israel’s Office of the Chief Scientist (OCS).

With this much positive news, why weren't BCLI shares trading significantly higher?

Actually. shares had begun to push higher on heavy volume recently, but some investors got spooked after they realized that the firm was running low on cash and had become overdue for a financing. Until that financing was in place, most longs decided it was too risky to keep positions in the stock.

Now, this the raise out of the way,  a key catalyst mentioned in the BioMedReports FDA Calendar should be announced shortly and if the news is as good as we think, this emerging firm which may well have the cure for ALS within reach will make a mark.

According to published tracking data, BrainStorm is expected to announce interim results for the first 12 patients from their initial phase study "by July 2012."-- as most recently announced (June 6, 2012). This key data could be out within a couple of days, if not sooner.

Indeed, while Dr, Karussis may not be able to draw scientific conclusions or say certain things in public statements, we have very good reason to believe that upcoming clinical data will continue to show strong results. Especially if the video report and earlier clinical trial results are any indication of what is going on in Israel.

We anticipate that now that the financing has been announced, this potential short-term trade is more "de-risked" and ready to move higher. This is especially true given the significance and upcoming unveiling of clinical data. (Update: We had reported that the warrants which were issued to investorsmight  be priced significantly higher, but that does not appear to be the case. That may be put additional pressure on the stock.)

Again, this stock could be set to gain traction now given all the fundamental and technical indications are in play as we anticipated. As always, we urge you to do your own due diligence.

Disclosure: LONG BCLI

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