Athersys und Pfizer ....

In my view, the reacquisition of complete control of its cardiovascular Multi-Stem program is a big boon for Athersys and sets up a potential short term catalyst for its sagging stock price. Now that Angiotech is out of the picture, Athersys has full control of partnership opportunities and is likely already is discussions with potential partners. In December 2009, Athersys partnered with Pfizer (PFE) in a $111,000,000 partnership in Multi-Stem for inflammable bowel disease. As a result of the transaction, ATHX shares skyrocketed from $1.00 to $6.40 in just a few days before the unbridled enthusiasm eventually waned. Given its close relationship with Pfizer, it wouldn’t surprise me if talks between the companies for cardiac are already under way.

Since the Angiotech cardiac collaberation was signed in May 2006, the interest by big pharma in off-the-shelf stem cell therapies, especially in the cardiac area, has grown exponentially. The landmark transaction occurred in December 2010, when Cephalon (CEPH) took a 20 percent stake in Mesoblast and bought the rights to market the Australian company’s adult stem-cell therapies for heart and nervous system conditions in a deal potentially worth more than $2 billion. Compare the significance and magnitude of this deal to the tiny $30 million market cap and $14 million enterprise value of Athersys and appreciation for the potential upside of a cardiac partnership becomes clear, despite the risk inherent in any biotech at this stage of development.

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Chali

These patents form part of Athersys' broad IP portfolio of more than 50 granted patents and more than 160 global patent applications around its stem cell technology and MultiStem product platform. The current IP estate, which incorporates additional filings and may broaden over time, could provide coverage for Athersys' product candidates, manufacturing processes and methods of use through as late as 2030.

About MultiStem

MultiStem is a proprietary cell therapy product consisting of a special class of stem cells that are obtained from the bone marrow or other tissue sources of healthy, consenting adult donors, and which have the demonstrated ability to produce a range of factors, as well as form multiple cell types. MultiStem therapy appears to promote tissue repair and healing in a variety of ways, such as through the production of multiple therapeutic factors produced in response to signals of inflammation and tissue damage. Athersys believes that MultiStem represents a unique "off-the-shelf" stem cell product based on work that demonstrates the ability to deliver multiple mechanisms of therapeutic benefit, administration of the product without tissue matching, and its capacity for large-scale production. Athersys has forged strategic partnerships with Pfizer Inc. to develop MultiStem for inflammatory bowel disease and with RTI Biologics to develop cell therapy for use with a bone allograft product in the orthopedic market.

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Chali

The work under the NINDS grant to develop MultiStem for the treatment of TBI will be conducted in collaboration with researchers at The University of Texas Health Science Center at Houston (UTHealth) Medical School. The research program will include preclinical safety and efficacy studies required to support an Investigational New Drug (IND) application and the clinical investigation of MultiStem treatment of TBI.

TBI is a serious clinical problem that affects young people, members of the armed services and other adults. According to the Centers for Disease Control, there are nearly 1.4 million emergency room visits each year as a result of TBI, resulting in 275,000 hospitalizations and 52,000 deaths annually.

"Based on the results from studies conducted with our collaborators, we believe MultiStem could have a significant impact in treating damage from acute neurological injury, such as TBI, ischemic stroke and other indications," said Dr. Van Bokkelen.

Dr. Charles Cox, Jr., who directs the multi-disciplinary effort at UTHealth Medical School that is focused on stem cell therapy for traumatic brain injury and related neurological injuries, will lead the collaboration with Athersys. "Our prior work with Athersys has demonstrated that MultiStem modulates the inflammatory component of secondary brain injury in preclinical models of TBI," said Dr. Cox, professor of pediatric surgery at UTHealth and director of the pediatric trauma program at Children's Memorial Hermann Hospital in Houston. "This is an area of tremendous unmet medical need, which carries both a high cost burden, as well as impacting patient and family quality of life. We will build on this promising work to advance the application of this cell therapy into clinical studies."

IWT Grant

The IWT grant will fund a product and process development program undertaken in Belgium by ReGenesys, Athersys' affiliate. A principal focus of these efforts will be the continued development of serum-free formulations for the manufacture of MultiStem and related cell therapy products. ReGenesys researchers will collaborate with researchers from the Katholieke Universiteit of Leuven, as well as certain corporate partners to complete the program.

"Our ReGenesys affiliate plays a significant role in the development of improved process and manufacturing approaches for cell therapy products," said William Lehmann, President and COO of Athersys, and Manager of ReGenesys. "We expect this grant-funded work to have substantial impact on product manufacturing and clinical development in Europe and globally."

About MultiStem

MultiStem(R) cell therapy is a patented product that has shown the ability to promote tissue repair and healing in a variety of ways, such as through the production of multiple therapeutic factors produced in response to signals of inflammation and tissue damage. MultiStem has demonstrated therapeutic potential for the treatment of inflammatory and immune disorders, neurological conditions, and cardiovascular disease, as well as other areas, and represents a unique "off-the-shelf" stem cell product that can be manufactured in a scalable manner, may be stored for years in frozen form, and is administered without tissue matching or the need for immune suppression. The product is extensively characterized for safety, consistency and potency. Athersys has forged strategic partnerships with Pfizer Inc. to develop MultiStem for inflammatory bowel disease and with RTI Biologics, Inc. to develop cell therapy for use with a bone allograft product in the orthopedic market

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Chali

•The majority of patients participating in the study received transplants from unrelated donors (19 of 36), and nearly all of the patients received peripheral blood stem cell (PBSC) transplants (34 of 36), both of which are associated with a higher risk of GvHD;
•All patients experienced successful neutrophil engraftment (median time of engraftment 15 days), and 86% of patients experienced successful platelet engraftment (median time of engraftment 16 days) which compares favorably to historical clinical experience for this patient population demonstrating a positive impact on blood and immune system recovery;
•Substantial reduction in acute GvHD incidence, relative to historical experience, at the highest single dose (11% grade II-IV GvHD, and 0% grade III-IV GvHD);
•Evidence of a dose response relationship, with patients receiving the highest single dose of MultiStem having a 33% lower absolute incidence of acute GvHD relative to patients who received a single low or medium dose, and patients receiving once weekly dosing of the medium dose through the first 30 days having reduced GvHD incidence relative to single or weekly dosing over the first two weeks post-transplant;
•Favorable relapse-free survival (RFS) rate at 100 days among all patients receiving MultiStem treatment relative to the historical clinical experience; and
•Limited infection-related complications over the first 100 days relative to historical clinical experience, consistent with the positive effect on engraftment rates.
Dr. Richard Maziarz, M.D., co-principal investigator of this study and Medical Director, Adult Stem Cell Transplantation Program at the Oregon Health & Science University Knight Cancer Institute, commented, "The results from this study are encouraging, and suggest that MultiStem therapy could provide clinical benefit to patients receiving allogeneic stem cell transplants. These patients are susceptible to GvHD and other complications from standard treatment regimens, and the data suggest that treatment with MultiStem could provide clinical benefits in several important ways. The data certainly justify additional clinical investigation, and I look forward to subsequent clinical studies to explore how MultiStem can help these individuals." The study results are being presented at the annual American Society for Bone Marrow Transplantation Tandem meeting in San Diego, California.

"We believe the results of this study are meaningful and suggest that administration of MultiStem could provide substantial benefits to patients receiving hematopoietic transplants, especially those patients that are traditionally considered to be in higher risk categories, such as those receiving transplants from unrelated donors or receiving peripheral blood stem cell transplants, both of which have historically been associated with a higher risk of GvHD," said Gil Van Bokkelen, CEO of Athersys, Inc. "We believe that these results could provide the basis for advancing this program clinically in an accelerated manner, and we look forward to discussing the data with the FDA."

Continued Development

These clinical results provide the foundation for further, accelerated development of MultiStem for the prevention and reduction of GvHD. Following final review of the data, and subject to input from its key scientific and clinical advisers, Athersys plans to meet with the FDA to discuss plans for the next phase of clinical development, which could include a blinded, controlled phase II/III study of MultiStem for GvHD prophylaxis and HSCT support. The study would be intended to help lay the groundwork for approval in this indication, but would also help continue to establish the scientific foundation for MultiStem in related areas including GvHD treatment, solid organ transplant and other areas of immune system dysfunction.

Safety Results

During the first 48 hours following MultiStem administration, patients were assessed for infusion-related toxicity and other acute adverse events. The primary endpoint for the study was the determination of the maximum tolerated dose, as determined by a continual reassessment methodology. Regimen-related toxicities and infusion-related allergic toxicities through 30 days after MultiStem administration were also monitored. Additionally, patients were evaluated for adverse events and infections through 100 days following the HSCT.

The administration of MultiStem was found to be well tolerated for all dosing groups in both the single and repeat dose administration arms. Immediately following dosing, there were no clinically significant changes to vital signs or evidence of allergic reaction associated with MultiStem administration. Over the 30-day observation period, no infusional toxicities or clinically significant adverse events definitively related to MultiStem occurred.

MultiStem had a favorable safety profile over the 100-day period following the HSCT. There were no graft failures, which compares favorably with historical graft failure rates of 5--15% for these types of patients. Of the 36 patients in the study, 30 patients completed 100 day follow-up and there were 6 withdrawals, including 2 relapses and 3 deaths (unrelated to treatment). Other serious adverse events in the first 100 days were consistent with expectations for this patient population.

HSCT Support Highlights

While the primary objective of this Phase I clinical trial was to evaluate the safety of MultiStem administered to HSCT recipients, additional data regarding secondary endpoints, GvHD incidence, infection and survival, have been collected and are being evaluated for safety and evidence of efficacy signals to facilitate planning for subsequent clinical studies. Specifically, following MultiStem administration, patients were assessed weekly by the attending physician for GvHD (and regimen-related toxicities), and information regarding infections and adverse events was collected as they occurred, through day 100.

Overall, MultiStem treatment was associated with a positive impact on blood and immune system recovery, as compared to expectations for this patient population based on historical experience and scientific literature, with 100% neutrophil and 86% platelet engraftment for study patients. The median time to engraftment was 15 days for neutrophils and 16 days for platelets.

The cumulative incidence of acute GvHD for all subjects enrolled in the study (i.e. irrespective of administered dose) was generally in line with expectations for this patient population based on historical experience and scientific literature, using Kaplan-Meier estimates censored for study withdrawal due to relapse and death. However, in the highest single dose group (10 million cells per kilogram body weight, infused on day 2 following HSCT), the 100-day cumulative incidence of moderate to severe acute GvHD was just 11%, which compares favorably with historical experience for this patient population (generally 40-60% grade II-IV GvHD), and, among the patients in this group, no patient developed severe GvHD. Additionally, at the 5 million cells per kilogram body weight dose level, once weekly dosing of the intermediate dose through the first 30 days provided apparent additional benefit over single or weekly dosing over the first two weeks post-transplant.


Importantly, the incidence of infections and mortality over the observation period appear to be in line with or better than what would be expected for this high risk patient population. Consistent with the positive impact on hematopoietic recovery, MultiStem was associated with a relatively low level of late stage infection and only one case of infection-related mortality occurred through 100 days, which compares favorably with historical experience with this patient population. Overall, the Kaplan-Meier estimate of relapse-free survival at 100 days was 81%, compared to an expectation of around 65-70% based on published results from previously published clinical studies using comparable treatment approaches and patient groups.

About the Disease Condition and Study Design

Leukemia and certain related conditions are often treated with radiation and chemotherapy to eliminate cancerous or diseased cells, but this process also severely compromises the native blood forming and immune system in the patient, leaving them susceptible to infection and other complications. To address this, a patient will often receive an allogeneic HSCT, whereby following radiation and chemotherapy treatment a patient's blood stem cells are replaced with a transplant of hematopoietic stem cells obtained from the bone marrow or peripheral blood of a healthy donor. Donors may be related or unrelated to the patient, but are matched according to tissue type in order to minimize the potential for GvHD, where donor immune cells transplanted with the donor HSCT attack tissue and organs of the patient. Following the transplant, the patient will often remain hospitalized in specialized units until successful engraftment provides a sufficiently functional immune system.

According to the Center for International Blood and Marrow Transplant Research, there are approximately 25,000 allogeneic HSCT performed annually globally, although this number is projected to increase due to the anticipated growth in incidence of hematologic malignancies associated with an aging population. While this treatment approach can be an effective medical therapy for these types of cancer, it is often associated with substantial tissue damage and side effects, such as GvHD. GvHD is a frequent complication associated with allogeneic HSCT, affecting approximately half or more of transplant recipients, and advanced GvHD can be severely debilitating or even fatal. Several factors affect a patient's likelihood of having GvHD and GvHD severity, including the treatment protocol used, the degree of tissue match between donor and recipient (with lower GvHD rates and severity associated with related donors and better tissue matches), and the condition of the patient among other factors. In addition, higher GvHD rates are typically observed in patients receiving peripheral blood stem cell (PBSC) transplants, as compared to patients receiving bone marrow-derived stem cell transplants.

The Phase I clinical trial was an open label, multi-center trial evaluating the safety and maximum tolerated dose of single or repeated dose administration of MultiStem following an allogeneic HSCT in patients being treated for leukemia or related cancers of the blood or immune system. The single dose arm evaluated the infusion of a single dose of MultiStem administered intravenously two days following a peripheral blood or bone marrow HSCT, and included patients in three dose groups, based on cells per kilogram body weight -- 1 million (n=6), 5 million (n=3) and 10 million (n=9). The repeat dose arm evaluated patients enrolled in two groups -- 1 million (n=3) and 5 million (n=3) per kilogram body weight -- with MultiStem administration scheduled for days 2, 9 and 16 and in a third group (n=12) with MultiStem administration of 5 million per kilogram scheduled for days 2, 9, 16, 23 and 30. The clinical trial was conducted at transplant centers in the United States and Europe, including the Oregon Health & Science University, University Hospitals Case Medical Center, Texas Transplant Institute, University of Pennsylvania, Mayo Clinic Hospital Arizona, and UZ Leuven.

Twenty male and sixteen female subjects enrolled in the study, ranging in age from 20-62 years old. Nineteen patients received HSCT from matched unrelated donors (MUD), including two with a slight degree of mismatch, and seventeen received HSCT from matched related donors (MRD). With respect to HSCT source, 34 grafts were from peripheral blood and two were from bone marrow, with 16 of 18 patients receiving PBSC transplants in the single dose arm of the study, and all 18 patients in the multiple dose arm of the study receiving PBSC transplants. All patients received MultiStem therapy from the same product bank, reflecting MultiStem's manufacturing scalability and shelf-life stability, an advantage over other cell therapies and an important potential commercial advantage for the company.

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"A range of studies show that MultiStem can reduce tissue damage and promoting healing and repair in multiple ways following a stroke, as well as in other acute neurological injuries. This data confirms prior findings and extends our understanding of how MultiStem can work through several distinct and important mechanisms, illustrating how we might be able to have a dramatic impact on outcomes and standard of care for stroke victims," said Dr. Robert Mays, Head of Neuroscience at Athersys. "We are excited about our ongoing Phase 2 clinical trial for treating stroke, which is being conducted at leading stroke centers across the U.S., and is focused on treating stroke victims in a clinically practical time frame, within 1 -- 2 days after the stroke. We believe this and other trials will enable us to demonstrate the clinical potential of MultiStem for stroke and other indications that represent substantial unmet clinical needs," concluded Dr. Mays. Athersys believes the stroke market represents a commercial opportunity of more than $15 billion annually.

In the preclinical model of stroke used in the study, animals that received treatment with MultiStem versus placebo showed statistically significant increases in the percentage of T regulatory (Treg) cells, which may play an important role in the healing process, and decreases in inflammatory T cells, which are believed to exacerbate damage in the brain following a stroke; a statistically significant reduction in the pro-inflammatory cytokine levels of IL-1β and TNF-α; and a statistically significant increase in levels of the anti-inflammatory cytokine IL-10, also known as human cytokine synthesis inhibitory factor (CSIF). At four days after stroke, animals treated with MultiStem had reduced levels of the serum cytokine IL-6 compared with placebo.

These outcomes support prior research at UTHealth, in which researchers found that animals treated with MultiStem showed normal spleen size and increased levels of anti-inflammatory cytokines in the blood whereas animals treated with placebo showed a reduction in spleen size and an increase in inflammatory cytokines in the blood. Through its multiple pioneering trials and clinical practice, UTHealth has become a leader in developing stem cell therapies for stroke and other neurological disorders that can be translated quickly into patient care

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Patients with leukemia or other related malignancies are typically treated by radiation and chemotherapy, which are administered to destroy cancerous cells, but also substantially impair the blood forming and immune system of the patient. These procedures are followed by a HSC transplant to reconstitute the immune system to fight infection and any remaining malignancy. Patients undergoing donor derived, or allogeneic, HSC transplants are at significant risk for serious complications, including GvHD, which results when transplanted immune cells attack various tissues and organs in the patient.  GvHD can be severe and life-threatening, with substantial impact on overall treatment requirements and costs, as well as on the patient's quality of life. Annually, there are estimated to be more than 25,000 allogeneic HSC transplants in the developed countries.

Athersys has completed a Phase I clinical study of the administration of MultiStem cells to certain patients having allogeneic HSC transplants. The study demonstrated the safety of MultiStem therapy in this indication and suggested that MultiStem may have a beneficial effect in reducing the incidence and severity of GvHD, as well as providing other benefits.  These results build on the work of Athersys scientists and collaborators who have demonstrated that MultiStem cells suppress undesired T-cell-mediated immune responses that are an important factor in causing GvHD and support tissue repair and regeneration, leading to a significant increase in survival in preclinical models.

Currently, the Company is preparing for a Phase II/III clinical study in the area. It has met with the FDA and received feedback regarding proposed plans for the next phase of clinical development and is finalizing the study design.  Based on current plans, the Company is preparing to be ready to start this study in 2014, but the initiation will depend on the progress in other clinical trials and the achievement of certain business development and financial objectives.

Orphan drug designation, which is intended to facilitate drug development, provides substantial potential incentives to the sponsor, such as fee reductions for agency meetings, study-design assistance, opportunities for expedited product development, orphan grant access, tax incentives and market exclusivity for the product upon regulatory approval (7 years for the U.S. and up to 10 years for the EU).