TM Editors' Note: This article discussed a microcap stock. Such stocks are more easily manipulated; do your own careful due diligence.

Shares of Neuralstem (CUR) tanked as much as 30% yesterday after the company reported safety and efficacy results for their stem cell treatment being used to treat patients with ALS. The trial met the primary endpoint of the study, which was how well tolerated the stem cell therapy was for these patients with ALS. To test the dose of safety Neuralstem transplanted about 16 million cells in a surgery format and the trial passed, which was a good first step. 

In terms of efficacy, 7 out of the 15 patients, or 47%, responded to the stem cell therapy treatment with NSI-566. This was measured by either a near-zero slope of decline or positive slope of ALSFRS score. These are measurements used for ALS patients to determine how well they respond to treatment. The treatment NSI-566 are transplanted cells that are placed into the patient's spinal cord and are supposed to help regenerate the remaining motor neurons in the body. 

This initial phase 2 trial did not fail on many accounts as the primary endpoint was safety, but it did show some efficacy,  with 7 out of 15 patients responding. Yes, there was no control arm in this trial so it can't be compared  at the moment with another standard of care therapy, but achieving such a response rate this early on is a good thing. Neuralstem has stated that it now intends to start a larger multi-center phase 2 trial using NSI-566 in patients with ALS. Now that the company has seen the initial efficacy it feels it has enough to move to a larger trial which it could then design with a placebo this time to compare with each treatment. This larger trial is expected to start some time in 2015 and should take about one year or so for results. 

Shares of Neuralstem are down from their 52-week high of $4.81 per share but the current share price of $2.56 per share makes it an attractive speculative play, especially after investors have seen initial efficacy of the NSI-566 cell therapy treatment against ALS. Of course there is still a lot of risk involved in the name, so investors should be cautious going forward. Still, the worst case scenario is over, as if the initial efficacy results were worse,  the share price would have tanked substantially. For now it may seem like a good investment in the stem cell therapy space. 

Part of the reason for the stock's decline was a report on TheStreet.com calling the company's assessment of results overly optimistic.