Why Neuralstem Inc. Shares Spiked Higher

Neuralstem soars after publishing its final phase 1 data for NSI-566. Should shareholders be cheering or jeering this news?

Mar 17, 2014 at 1:29PM

Editor's Note: A previous version of this article indicated that a phase 2 study of NSI-566 had not yet begun. The Fool regrets the error.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Neuralstem (NYSEMKT:CUR), a clinical-stage biopharmaceutical company focused on treating central nervous system disorders through neural stem-cell therapies, advanced as much as 13% after reporting final phase 1 results utilizing NSI-566 in treating amyotrophic lateral sclerosis.

So what: According to the results, which were published in the Annals of Neurology and included data from the final six patients in the trial since its interim data update, NSI-566, a spinal cord stem-cell therapy, can be used safely in cervical and lumbar spinal-cord segments and didn't accelerate disease progression, with half of all tested patients demonstrating clinical improvement throughout the trial. Neuralstem notes that the drug merits further investigation and also pointed out the possibility that increasing the number of injections could benefit patients. A phase 2 study began in September of 2013. 

Now what: This is obviously encouraging data for Neuralstem, but let's keep in mind that we're talking about a very early stage therapy here with a lot of testing yet to come. This trial was more of a safety confirmation rather than an efficacy-based trial, so the big tests, including simply nailing down the right dosing, are still on the horizon for NSI-566. Also keep in mind that stem-cell therapeutics have a notoriously poor track record at succeeding in trials, which has largely been reflected in Neuralstem's share price over the years. With that in mind, I'd suggest sticking to the sidelines until we have more concrete efficacy data available from a phase 2 study.

Neuralstem may be soaring today, but it'll probably be hard-pressed to keep up with this top stock in 2014
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Jun 12, 2015 at 5:01PM

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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