Power of Athersys stem cells may be underestimated, analyst says

WBB Securities analyst Steve Brozak isn't sure whether people understand how much better the stem cell therapy of Cleveland, Ohio-based Athersys Inc. is for treating heart attacks than the standard-of-care treatment. Brozak raised his rating on Athersys stock to "strong buy" from "buy" in light of clinical evidence that could change the way heart attack patients are treated.

WBB Securities analyst Steve Brozak isn’t sure whether people understand how much better the stem cell therapy of Cleveland, Ohio-based Athersys Inc. is for treating heart attacks than the standard-of-care treatment.

Brozak today raised his rating on Athersys stock to “strong buy” from “buy,” according to the Wall Street Journal.

The move came a day after the Cleveland biopharmaceutical company reported a second-quarter loss of $3.1 million and, more importantly, repeated Phase 1 clinical trial results for its MultiStem adult stem cell therapy that eventually could change the way heart attack patients are treated.

A week ago, Athersys reported top-line results from a small Phase 1 trial to determine the safety and maximum dose of MultiStem for heart attack patients. MultiStem is an off-the-shelf stem cell treatment derived from the bone marrow of adults or other non-embryonic sources.

The cells have a drug-like effect: They reduce inflammation, protect damaged tissue and form new blood vessels, and then are cleared from the body.

In the recent trial, three escalating doses of the therapy (20 million, 50 million and 100 million cells) were well tolerated by patients. And patients with more severe heart attacks demonstrated better than 25 percent improvement in heart function (measured as ventricular ejection fraction) when given medium and high doses of MultiStem.

MultiStem produced “a greater benefit than any medication, short of opening the artery, that we currently use,” said Dr. Marc Penn, co-principal investigator on the trial and director of Cardiovascular Cell Therapy at the Cleveland Clinic, as well as the Clinic’s Skirball Laboratory for Cardiovascular Cellular Therapeutics, during last week’s conference call.

“An absolute improvement of 10 percent in left ventricular ejection fraction in patients who are having a myocardial infarction is a very significant benefit,” said cardiologist Penn.

That’s why analyst Brozak called MultiStem a potential “paradigm shift in the treatment of heart attacks” during last week’s conference call with company executives.

On Monday, Brozak wondered whether people understand the difference in results between treating heart attack patients with MultiStem versus the standard of care — angioplasty and stent placement to open blocked heart arteries.

“I think there’s a bit of a disconnect,” Brozak said. “I don’t think people really understand the orders of magnitude of difference.”

During the same call, a Chicago-area investor bemoaned the low price for Athersys stock. Misunderstanding MultiStem’s potential for treating heart attack patients (not to mention patients with several other damaging disorders) could help explain why Athersys shares hover around the $3 mark.

The shares fell 7 cents to $3.13 today on the Nasdaq Stock Market.

Athersys Chairman and CEO Gil Van Bokkelen tried to temper Bozak’s enthusiasm by pointing out that the MultiStem results came from a small study. “We still have a lot of work to do to establish clinical proof of concept,” Van Bokkelen said.

“But in terms of the results that we’re seeing so far … this appeared to be a very robust response by the patients that were receiving treatment,” he said. In addition, “these results are entirely consistent with the preclinical results that we’ve seen previously.”

Both the consistency and robustness of results “are exciting to us,” Van Bokkelen said.

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