"This is an exciting opportunity for us," Rich Daly, chairman and CEO of Neuralstem Inc., said about top-line phase II data of NSI-189 to treat major depressive disorder (MDD). Those aren't necessarily words that might follow a miss on the primary efficacy endpoint – a statistically significant reduction in depression symptoms on the Montgomery-Asberg Depression Rating Scale (MADRS) – which sent the company's shares (NASDAQ:CUR) tumbling as much as 60 percent Tuesday before closing at $2.81 for a loss of $2.77, or 49.6 percent.

Acknowledging the primary endpoint failure, Daly cited encouragement on the directionally positive response on the MADRS dose at 40 mg once daily and a secondary endpoint hit on the patient-rated Symptoms of Depression Questionnaire (SDQ), which achieved statistical significance (p=0.044) at 40 mg once daily compared to placebo.

Daly told BioWorld the Germantown, Md.-based firm will press ahead to analyze the data "in a systematic and deep fashion."

The phase II experiment enrolled 220 individuals with recurrent MDD and a minimum MADRS score of 20, treated as outpatients, to compare the oral neurogenesis stimulator at 40 mg once daily or 40 mg twice daily to placebo over a 12-week treatment period. The mean baseline MADRS score of participants was approximately 32.

The study used a two-staged sequential parallel comparison design (SPCD), randomizing individuals who met screening criteria on a double-blind basis into one of the two treatment arms or placebo. After six weeks, individuals in the placebo group who appeared to respond remained on placebo, Daly explained, while placebo nonresponders were re-randomized across the three trial arms, in each case for an additional six weeks. Neuralstem pooled the results of each six-week stage for statistical endpoints.

In addition to the MADRS and SDQ findings, the study showed a directionally positive trend on the Hamilton Depression Rating Scale (HAM-D17), an additional secondary endpoint, at both doses. Combined, the MADRS, SDQ and HAM-D17 measures contain 73 items, "so to do the analysis to get a much better handle on [the results] is going to take a fair amount of time," Daly said.

Additional exploratory endpoints included the Clinical Global Impressions-Severity and Improvement scale and several measures of cognition, according to Cortellis Clinical Trials Intelligence.

Although Neuralstem did not disclose specific safety data, Daly said both doses of NSI-189 were well-tolerated and no serious adverse events were reported.

"We're going to do a much deeper dive on the safety side," he said.

'There's great need here'

Because of the re-randomization, Neuralstem can't directly compare findings between those in the trial who were treated for 12 full weeks on a single regimen and those who were switched after week six. However, individuals enrolled in the phase II study are being offered the opportunity to enroll in a six-month observational study to monitor their depression and to assess the durability of effect and long-term safety of NSI-189. That study is expected to report data early next year.

"We're excited to look at that analysis as it comes forward," Daly said.

"Given the performance on the SDQ, and with further analysis, we would be very excited to be sitting with the FDA and talking with them about how to advance the product," he added, addressing the road forward for NSI-189, which Neuralstem wholly owns. "This is clearly an underserved therapeutic area. Look at the amount of treatment failure even with currently available products. There's great need here. As we dig into the data and learn more about how the product works, and where it works, we would welcome the opportunity to meet with the FDA."

To be sure, MDD is an indication still seeking a major standout among newer pipeline prospects. In December 2016, Cerecor Inc. had a phase II failure with its candidate, CERC-301, that halved the value of its shares. And although Allergan plc plans to embark on a phase III MDD program with Botox (onabotulinumtoxin type A) on the basis of phase II data and Alkermes plc has its candidate, ALKS-5461, in a phase IIIb study designed to boost its chances in front of the FDA, neither candidate is without drawbacks. (See BioWorld Today, Dec. 1, 2016, April 7, 2017, and June 13, 2017.)

As a small biopharma with $11.7 million in cash as of March 31 and a strategy to partner midstage assets, Neuralstem faces a greater sense of urgency, however. In addition to MDD, NSI-189, the lead compound in the company's small-molecule drug discovery program, has shown neurogenic characteristics in preclinical models of Angelman syndrome, irradiation-induced cognitive impairment, type 1 and type 2 diabetes and stroke. The data generated in MDD may have read-through in other NSI-189 indications, according to Daly, a big pharma veteran who joined Neuralstem last year.

NSI-566, Neuralstem's lead cell therapy candidate, is a spinal cord-derived neural stem cell line in development to treat amyotrophic lateral sclerosis, or ALS, chronic spinal cord injury and ischemic stroke.

Although a phase II study of NSI-566 reported in 2015 met its primary safety endpoint in ALS and the study gave the company a working hypothesis about how to differentiate responders from nonresponders, investors nevertheless responded without enthusiasm, knocking the company's shares down 36.6 percent. (See BioWorld Today, March 13, 2015.)

Phase II studies are exploratory in nature, Daly said. On that basis, the NSI-189 effort provided "the opportunity to get further clarification on where the drug is best suited," he said. "We're seeing some indications of where it might best be utilized in the patient population, and with further digging into the data, we're confident we'll get a better handle on that."