Don't call it a comeback, but Neurona knocks out $120M raise a year after layoffs

Almost a year ago to the day, Neurona Therapeutics was cutting staff, citing a difficult funding environment. Fast forward to today, and the company has reeled in a much-needed $120 million. But according to CEO Cory Nicholas, Ph.D., you definitely should not call this a comeback.

“No, it's not a comeback. We've been here for years. We've been at it the whole time. Never stopped,” Nicholas said with a laugh during an interview with Fierce Biotech.

But in all seriousness, the same challenging funding environment remained in play throughout 2023. What helped was a positive early readout for epilepsy cell therapy NRTX-1001.

“This wasn't easy by any stretch, and it's a real testament to the data that we've generated this past year and to the perseverance of the team that continue to execute even though we have less resources available,” Nicholas said.

Neurona revealed an early peek from two patients in a phase 1/2 trial of the lead asset NRTX-1001, showing a 95% seizure reduction, in December 2023. The patients had drug-resistant mesial temporal lobe epilepsy (MTLE), a difficult form of the disorder that causes ongoing seizures despite treatment.

The patients, who had been having 32 and 14 seizures per month, saw elimination of the more severe focal-impaired awareness seizures—when a person loses consciousness. These results have been maintained at the 17- and 12-month points, respectively. Cognitive tests also showed an improvement in some measures and no deterioration at six months and every three months thereafter.

“All of their severe seizures have been eliminated since the first month,” Nicholas said of the first two patients.

The readout, presented at the Annual Meeting of the American Epilepsy Society, was a triumph for Neurona, which had started off 2023 with a 25% workforce reduction impacting about 18 out of 68 employees. Since then, Nicholas said the remaining staff have been heads down working to prove out NRTX-1001.

“It's really this combination of continuing to focus and stick to the plan along with the data that we all had hoped would manifest, but until you actually see the data emerge, you don't know and that's been very positive so far in the trial—with the caveat that it's still an ongoing trial … but it couldn't really be going better at the start of this trial," Nicholas said.

The layoffs were tough but necessary to protect cash flow and keep the trial going.

“It was unfortunate that we had to make that sacrifice that we did, because we didn't know the timing. You know, hindsight is 20/20. If we knew that this was around the corner, we may not have had to do that. But we just didn't know,” Nicholas said.

Neurona managed to raise a little bit of cash through the year from existing investors to keep afloat, but today’s raise sees some new voices get involved. The round was co-led by Viking Global Investors and Cormorant Asset Management, with participation from The Column Group, Passaic Capital Management, LYFE Capital, Schroders Capital, Willett Advisors and many more.

The cash will go towards NRTX-1001, of course. Neurona hopes to accelerate the phase 1/2 trial to a higher dose level this year, then move into bilateral MTLE, which means epilepsy that is impacting both sides of the brain. Other indications further down for the “pipeline in a product,” as Nicholas calls it, include Alzheimer’s with epileptiform.

Neurona will also funnel some cash towards its gene editing work, which stayed intact after the prioritization last year. That would help develop the biotech’s next candidate further down the road.

Cells on demand

The open-label trial is still early days, in just five patients with two on therapy long enough to see efficacy, Nicholas acknowledged. But this is a really difficult population of patients who have run out of options, besides a lobectomy—a procedure Nicholas describes as “medieval” that removes the section of the brain causing problems. Patients often have cognitive impairment, lose memory, speech or vision, or their personalities change.

Neurona’s cell therapy, on the other hand, aims to restore the brain tissue using inhibitory neurons that secrete the inhibitory neurotransmitter GABA. These neurons are derived from a single stem cell line and are universal for all patients.

The treatment is delivered via an MRI guided procedure exactly to the location of the seizures in the brain, which Nicholas said is much less invasive than the surgical intervention. It’s meant to be a one-and-done procedure, and so far the data is showing that might be the case.

Unlike cell therapies for cancer, there’s no pre-conditioning needed, no immunological matching because the central nervous system is immune privileged, according to Nicholas. However, Neurona has included an immunosuppressant regimen for the first year of treatment. So far, the bulk of treatment-related adverse events have come from that, rather than NRTX-1001 itself.

At the year mark, patients can drop the immunosuppressants. The early data has shown the seizure reduction remains even after the drop off but the adverse events—which were mild to moderate to begin with—have disappeared. Nicholas thinks the immunosuppressant regimen could be shorter, which could be tested out in future trials.

Also unlike the cancer cell therapies, Neurona’s candidate does not need to source any patient tissues. The product can be shipped directly to a waiting patient when they enter the trial. That makes the manufacturing process much easier, which has proven to be challenging for approved cell therapies in the oncology space.

“The cells are ready on demand,” Nicholas said.

Data on the next three patients in the study should be available later this year. Two of these patients have seen total seizure reductions, with the first patient entering the study with 26 seizures per month and clocking a 64% reduction of focal awareness events at three months. The fifth subject entered with two seizures per month and has seen a drop of 75%.

However, patient number four has not seen an improvement. This patient had a baseline rate of two per month and was still experiencing volatility in seizure count, which Nicholas said is consistent with that patient’s history.

Nicholas said that preclinical evidence suggests that the neurons take about six months to set in, so he’s optimistic that the numbers will rise for these three patients.