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Paul Lebo, CFA
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Athersys Inc.: MultiStem Cell Therapy Is The Most Advanced And Tested Treatment For ARDS, And Thus COVID-19
Apr. 03, 2020 11:43 AM ETAthersys, Inc. (ATHX)19 Comments
Summary
In an interview Wednesday on Fox News, Athersys CEO Gil Van Bokkelen noted that Athersys is currently coordinating with the FDA to implement a large scale study to treat COVID-19.
The study will involve several hundred COVID-19 patients that are experiencing acute respiratory distress syndrome, or ARDS.
The treatment that Athersys will be using in the COVID-19 large scale study has already been proven in a Phase 2 study, which took years to execute.
Based on the results from the Phase 2 study, the FDA awarded fast track status to Athersys' MultiStem. This was months before the COVID-19 outbreak commenced.
Yesterday, Alpha Exposure published a piece titled Don't Believe The Athersys Hype In ARDS. This article takes issue with Alpha Exposure's two main points.
Company Overview
Athersys Incorporated (Ticker: ATHX) is a biotechnology company that is focused primarily in the field of regenerative medicine and is committed to the discovery and development of best-in-class therapies designed to extend and enhance the quality of human life. ATHX has established a portfolio of therapeutic product development programs to address significant unmet medical needs in multiple disease areas. Their lead project that has the most potential is MultiStem cell therapy, a patented and proprietary allogeneic stem cell product, with several clinical stage programs. ATHX’s current clinical development programs are focused on treating neurological conditions, cardiovascular disease, inflammatory and immune disorders, certain pulmonary conditions and other conditions where the current standard of care is limited or inadequate for many patients. These represent major areas of clinical need, as well as substantial commercial opportunities and ATHX is pursuing opportunities in several potential multi-billion dollar markets.
MultiStem cell therapy
MultiStem cell therapy is a breakthrough in the field of regenerative medicine and stem cell therapy and could be used to treat a range of diseases. MultiStem cell therapy is a patented biologic product that is manufactured from human stem cells obtained from adult bone marrow and consists of a special class of human stem cells that have the ability to express a range of therapeutically relevant proteins and other factors, as well as form multiple cell types. MultiStem treatment has shown the potential to enhance tissue repair and healing in multiple ways, including reducing inflammatory damage, protecting tissue that is at risk following acute or ischemic injury, and promoting formation of new blood vessels in regions of ischemic injury. These cells appear to be responsive to the environment in which they are administered, by homing to the sites of injury and/or organs involved in injury response, and providing active disease response, while producing proteins that may provide benefit in both acute and chronic conditions. In contrast to traditional pharmaceutical products or biologics that generally act through a single biological mechanism of action, MultiStem cell therapy may enhance healing and tissue repair through multiple distinct mechanisms acting in parallel, such as by producing a range of therapeutic factors and dynamically responding to the needs of the body, resulting in a more effective therapeutic response. Like drugs, these cells may be stored for an extended period of time in frozen form and used off-the-shelf. Following administration, the cells have been shown to express multiple therapeutically relevant proteins, but unlike a traditional transplant, are subsequently cleared from the body over time, analogous to a drug or biologic.
Advantages of MultiStem versus Traditional Treatment
MultiStem treatment has a few key advantages versus traditional treatment. Currently, the only FDA-approved drug available for ischemic stroke is the anti-clotting factor, tPA, which must be administered to the patient within three to four hours of the onset of the stroke. Administration of tPA beyond this time frame is not recommended, since it can cause bleeding in the brain or even death. Given this limited therapeutic window, it is estimated that less than 5% of ischemic stroke victims currently receive treatment with tPA. However, MultiStem expands the treatment window to 36 hours after the stroke which basically includes all stroke victims.
A key aspect of MultiStem cell therapy is the ex vivo expansion capacity of the cells that comprise the product. This enables large-scale production of the clinical product, which is associated with greater consistency, specificity and cost of goods advantages over other cell therapies. MultiStem cells have the potential to be produced on a large scale, processed, and cryogenically preserved, and then used clinically in a rapid and efficient manner. Material obtained from a single donor may be used to produce hundreds of thousands, or even millions, of individual doses, representing a yield far greater than any other stem cells have been able to achieve. Additionally, MultiStem may be administered without tissue matching or the need for immune suppression, analogous to type O blood. This ability of MultiStem to be manufactured on a large scale and administered without a tissue match differentiates it from traditional bone marrow transplants and other stem cell therapies. The MultiStem product would be unique among regenerative medicine approaches because it has the potential to be manufactured on a large scale, may be administered in an “off-the-shelf” manner with minimal processing, and has the potential to augment healing by providing biological potency and therapeutic effects that other cell therapy approaches may not be able to achieve.
Furthermore, while a single infusion of MultiStem is expensive, it represents just a small fraction of the cost for retraining and maintaining a patient who is seriously disabled for the remainder of their respective lives. Early estimates show that MultiStem could potentially cost between $25,000 and $30,000 per dose. However, a study published in Stroke showed that the average lifetime cost of caring for a patient after an ischemic stroke to be $68,769 and that annually, it costs a little more than $5,000 per year in medication, facilities and medical personnel.
Market Size and Potential of MultiStem
ATHX believes the therapeutic and commercial potential for MultiStem cell therapy to be very broad, applying to many areas of significant unmet medical need, and they are pursuing opportunities in several potential multi-billion dollar markets. By applying their proprietary MultiStem cell therapy product, ATHX has established therapeutic product development programs treating neurological conditions, cardiovascular disease, inflammatory and immune disorders, and other conditions. ATHX’s programs in the clinical development stage include the following: Ischemic Stroke, Acute Myocardial Infarction, Acute Respiratory Distress Syndrome and Hematopoietic Stem Cell Transplant / GvHD.
The United States, along with many other nations, is experiencing an unprecedented demographic shift that is resulting in a significantly expanded population of older individuals. According to United States Census data, in the next few years there will be a dramatic increase in the number of individuals over the age of 65, as this segment of the population increases from 40.2 million individuals in 2010 to more than 72 million people in 2030, representing an increase of approximately 80%. Data from the National Center for Health Statistics shows that as people get older, they are more susceptible to a variety of age related conditions, including heart disease, stroke, certain forms of cancer, diabetes, progressive neurological disorders, various chronic inflammatory and immune conditions, renal disease and a range of others. As a consequence, as people get older they spend far more on healthcare. On average, they spend four to ten times more on healthcare annually at age 65 or beyond than when they were younger and more healthy. MultiStem cell therapy will give ATHX significant revenue opportunities in several multi-billion dollar markets. Furthermore as the population begins to age, there will be more patients will medical needs which will be an additional revenue driver for ATHX as the size of the market increases.
Recent developments
I encourage readers to view the attached video, which was produced on Wednesday and features Athersys’ CEO on Fox News. In the clip, the CEO clearly indicates that Athersys and the FDA have been jointly working to design and implement a large-scale study involving several hundred COVID-19 patients. The study, to begin “very soon,” will employ the same tried and trusted MultiStem that was successfully employed in the prior Phase 2 study. This video shows that the "highly relevant" designation from BARDA is in fact meaningful. Any reasonable person would agree that if the FDA is about to sign off on a study involving several hundred COVID-19 patients, then it must believe that MultiStem has the potential to be a very viable treatment option.
I would also encourage readers to study several recent Athersys press releases which insinuate that the company is nearing a breakthrough in MultiStem. Most recent, on April 1, 2020, Athersys’ partner in Japan, Healios announced that it is establishing a sales and marketing department in order to “carry out the preparation that is required in advance of the acquisition of marketing approval for regenerative medicine products.” This is a clear reference to MultiStem and planned roll-out in Japan. In addition, earlier this week, investors learned that Healios “increased its investment in Athersys by fully exercising warrants to acquire additional shares.” Specifically, Healios bought an additional 4 million shares. This is in addition to the 12 million shares already owned, and brings Healios’ ownership of Athersys to 9.4%. Any reasonable bystander would view this insider purchase as an indication that Healios believes MultiStem will ultimately be approved for use in ARDS and will achieve commercial success. Lastly, and rather importantly, two weeks ago, Athersys made a key hire, Maia Hansen, Senior Vice President of Operations and Supply Chain. Her role is to “establish and manage a sustainable supply chain built to enable reliable, cost effective and best in class commercial manufacturing and product distribution capabilities to support commercial success.” Once again, this is a clear signal that Athersys believes its MultiStem will be successful in the large-scale FDA trial and beyond
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