By: Tomas Ronolski - AllPennyStocks.com News

Tuesday, March 3, 2015

“I think that people across the world in the next couple years are going to be as blown away as I was with our father when they see the power of stem cells and what they do for patients with not just stroke but with dementia and traumatic brain injuries and spinal cord injuries.” That’s what Dr. Murray Howe, head of the radiology department at ProMedica Toledo Hospital and son of Mr. Hockey Gordie Howe, recently told CBS Detroit about an experimental stem cell treatment in Mexico that has delivered a positive response for his father, who suffered a stroke in October. Strokes are a leading killer and major strain on healthcare systems worldwide, with little currently available for treatment. The standard is the clot-buster tPA, or tissue plasminogen activator, but it must be administered within three to four hours from the onset of the stoke for any chance of improving clinical outcome. Sadly, most of the nearly 800,000 Americans and 15 million people globally that suffer a stroke each year don’t make it to the hospital in time for this limited therapeutic option. Approximately 130,000 Americans die each year from a stroke, or 1 out of every 20 deaths, according to the Centers for Disease Control and Prevention. Ischemic stroke (a result of an obstruction within a blood vessel supplying blood to the brain) is far and away the most prominent form, accounting for about 8 out of every 10 stroke cases.

There are more than 50 clinical trials going on around the world testing the safety and efficacy of stem cells to treat ischemic stroke patients, with favorable data coming from many. In that vein, investors should be starting to look ahead to results from a Phase 2 trial by Athersys, Inc. (NASDAQ:ATHX) on its cell therapy product called MultiStem expected in April. MultiStem is an allogeneic, “off-the-shelf” regenerative medicine product with a unique mechanism of action that has been shown in laboratory and clinical settings to have the ability to, amongst other things, reduce inflammation and promote tissue repair and healing, producing a significant and durable response for multiple indications. Importantly in the case of stroke, Athersys is looking to open the window of treatment time to days (perhaps up to a week), instead of only a few hours to improve clinical outcomes.

In the Phase 2 trial, ischemic stroke patients are being treated with MultiStem one to two days after the stroke occurs. Enrollment is completed with interim safety and initial efficacy results expected next month.

Athersys chief executive and chairman Gil Van Bokkelen has been vocal for some time now about the opportunity in Japan with respect to regenerative medicine, especially as it relates to treating stroke patients, a great area of unmet medical need for the country. Japan is staring at demographic challenges and mounting stress on its national healthcare system in the near future as its elderly population is growing drastically. In fact, Japan’s Ministry of Health Labor and Welfare says it sees the percentage of people over 65 basically doubling in the coming years. One of the ways that Japan hopes to combat escalating costs to care for the elderly is through innovation, which has led to the National Diet passing legislation to modify the country’s Pharmaceutical Affairs Law and establishing the Regenerative Medicine Law to support research and bring new therapeutics more quickly to market without compromising safety.

Athersys has been building relationships and meeting with Japanese leadership in preparation to expand development of MultiStem in recent years. The initiatives took the next step as disclosed in a press release on Monday announcing the penning of a partnership and license agreement with Chugai Pharmaceutical Co., Ltd. (Tokyo Stock Exchange:4519) to exclusively develop and commercialize MultiStem for ischemic stroke in Japan.

Regarding the new partnership, Dr. Van Bokkelen commented, “Chugai has been a leader in the development and introduction of innovative biologics and has successfully established one of the top sales forces in the prescription drug field in Japan, which we believe represents a key competitive advantage that can help both companies maximize value.”

Per the agreement, Athersys is to receive an upfront payment of $10 million from Chugai. Athersys is also entitled to up to $45 million more based upon MultiStem meeting certain developmental, regulatory milestones and sales milestones up to 17.5 billion Yen (about US$150 million at today’s exchange rate). Further, Athersys will collect double-digit royalties on net sales and payments for products supplies to Chugai.

"By combining Chugai's strong expertise in biological pharmaceuticals, we hope to bring MultiStem to the Japanese healthcare system as a new treatment modality during the critical phase of ischemic stroke," said Tatsuro Kosaka, President and Chief Operation Officer at Chugai, in a statement Monday.

Shares of Athersys have performed exceptionally well in the past 10 weeks after effectively making a “double bottom” technical pattern on a support at $1.15. The stock rebounded off that level and hasn’t looked back since, printing a high of $2.29 in January, $2.76 in February and shooting as high as $3.29 with Monday’s news to kick off March for a bottom-to-top rise of 186%. The partnership and upfront payment pushed the stock to its highest level in 11 months, but investors should be on the watch for the early data from the mid-stage trial for ischemic stroke as it could certainly serve as a catalyst for a large move next month.

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