On Thursday morning, Neuralstem reported results from preclinical testing on rats in which their proprietary neural stem cells, called NSI-566, made significant progress in restoring motor function to disabled animals. After severing the spinal cord and rendering the rats permanently paraplegic, Neuralstem scientists transplanted the spinal stem cells into the damaged area. Over the course of seven weeks, the treated rats had substantial motor function restored, and the stem cells showed long-distance growth with synaptic connectivity. The leap from an animal model to human testing can be large, and there have been several companies in the past that have shown this kind of neurogenerative results in rats, so investors may be wary of putting too much faith in the results of the study. NSI-566 cells are also in Phase I/II trials for Amyotrophic Lateral Sclerosis (ALS).
CUR has seen a resurgence of trading activity this month after reporting the completion of a Phase I ALS trial in late August for NSI-566. Better indication of this candidate’s success will begin to be judged when the company releases the full data set from the recently concluded trial, which is expected to be reported some time in the middle of next year. A long position after Neuralstem’s mid-August capital raise made for a nice swing trade into the run-up to yesterday’s news (see PropThink’s previous coverage), however the recent capital raise so close to new clinical data was a bit surprising. Neuralstem should have enough capital from these two offerings to continue operating through 3Q13 if it maintains its historical burn rate of roughly $9M annually.