May 20, 2016
By Alex Keown, BioSpace.com Breaking News Staff
GERMANTOWN, Mary. – Shares of Neuralstem are slightly down this morning after the company announced a reorganization combined with the termination of an unknown number of employees.
The planned reorganization and job cuts are expected to free up capital that will allow the company to advance its Phase II NSI-189 neurogenic small molecule program for the treatment of major depressive disorder. Additionally, Neuralstem said the monies will also allow the company to pursue collaborations for the NSI-566 stem cell therapy program that will expedite clinical development. Neuralstem’s first stem cell product candidate, NSI-566, a spinal cord-derived neural stem cell line, is under development for treatment of amyotrophic lateral sclerosis.
“This reorganization is necessary to efficiently allocate our resources on the company’s refocused strategy, thereby creating value for all stakeholders… Taking these steps will enable us to continue to execute on our clinical development plan for NSI-189 while retaining our core proprietary stem cell technology,” Rich Daly, Neuralstem’s chief executive officer, said in a statement.
Neuralstem announced the implementation of a “refocused clinical and corporate strategy” in January. The new strategy emphasizes Neuralstem’s “commitment to prioritize the small molecule platform, undertake business development efforts to secure alternative funding and partnerships for its stem cell assets and to enhance the company’s visibility in the capital markets.”
It was unclear how many employees Neuralstem will terminate, but according to the company’s statement, layoffs will take place across all divisions. The company said the cuts will not only free up funds for operating expenses, but will allow the company to retain “the expertise needed to implement the company’s refocused strategy.”
Earlier this month, Neuralstem enrolled its first patient in a Phase II trial of NSI-189 for the treatment of major depressive disorder. NSI-189 is the lead compound in Neuralstem’s neurogenic small molecule program. NSI-189 is believed to stimulate neurogenesis, synaptogenesis and increase hippocampal volume, all of which are believed to be effective in reversing depression, enhancing cognition, and promoting neuroregeneration, the company said. In a Phase I trial, NSI-189 was shown to be safe and demonstrated large treatment effects in two key depression outcome measures.
Last week, Neuralstem announced its intention to sell 2,700,000 shares of its common stock to a private holder in order to raise $1.08 million. The shares were sold at 40 cents apiece. Neuralstem’s stock is currently trading at 32 cents per share. Neuralstem intends to use the net proceeds from that deal, as well as other stock transactions, to fund regulatory, preclinical and clinical activities as well as for general corporate purposes, including working capital and the repayment of debt.
In April, Neuralstem received a notice from the NASDAQ Stock Market LLC that the company is not in compliance with the Nasdaq listing rule that calls for a minimum bid price of $1 for the company’s common stock. The notice is usually sent to a company when its stock has been below the $1 per share threshold for 30 consecutive business days. Neuralstem has until Oct. 17 to regain compliance.
