StemCells Inc (NASDAQ:STEM) announced its decision to terminate the Company’s Phase II Pathway Study in spinal cord injury following an in-depth review of data from the study and after obtaining the concurrence of the study’s Interim Analysis Data Monitoring Committee (the “IA-DMC”).  While the results showed overall improvement in patients treated with the Company’s proprietary cells, the magnitude of the effect and the perceived trend of the effect over time did not justify continuing the study or exploring the variability in the initial patient observations, given the financial resources available to the Company.

Seventeen patients have already been dosed in the Pathway Study.  The first cohort of the Pathway Study, consisting of six patients, was designed to assess the safety, and preliminary signs of efficacy, of cell administration into the cervical cord and select the dose level for the 40-patient second cohort. The second cohort of the Pathway Study was a randomized, controlled and single-blinded arm of the trial in 40 motor complete patients.

The six-, nine- and twelve-month results from the first cohort of the Pathway Study revealed encouraging patterns of improvements from baseline, especially in the first six months of the study. This was confirmed separately by a review of the data by independent experts in spinal cord injury, who agreed that the overall results indicated evidence of biological activity. However, the Company observed in this cohort a declining trend in the magnitude of the effect in both strength and function at the twelve month time point. While the results at twelve months were still improved from baseline, this late variability led the Company to conduct an earlier‑than‑planned interim analysis of the Cohort II data.  The results of this interim analysis, which were reviewed by the Company as well as by the IA-DMC, showed differences in motor strength that favored the treatment group, but the magnitude of the effect led both the Company and the IA-DMC to conclude that achieving the primary endpoint objective of the Pathway Study would be unlikely. Based upon these findings, the Company has decided to terminate the study and close out operations.

“Despite the outcome of the Pathway Study reported above, the Company is proud of our team’s numerous accomplishments and successes to date,” said Dr. Stephen Huhn, Chief Medical Officer and VP of Clinical Research. “Data from earlier clinical trials involving the Company’s proprietary HuCNS-SC® human neural stem cells have demonstrated an early signal of biological activity in multiple disease indications. Our earlier Phase I/II clinical trial in chronic thoracic spinal cord injury showed measureable gains, while the Phase I/II clinical trial in geographic atrophy showed a positive safety profile and favorable preliminary efficacy. Additionally, a Phase I study in children with Batten’s disease showed that transplantation of the cells into the brain was safe and resulted in long term survival of the cells.”

Dr. Huhn continued, “Even in the Pathway Study, we believe we see a biological signal in many of the patients.  Equally important, the first cohort of the study also confirmed the safety of cell administration into the cervical cord. The collective human data we have generated across all of our studies reinforce our belief that our cells have an excellent safety profile and that there are neurological and retinal disorders with unmet need that may be helped by cell transplant. Unfortunately, the Company does not have the resources to implement changes in our development program to permit further investigation.”

“That we did not see significant recovery of motor functions in the Pathway Study is disappointing given the Company’s nearly complete restoration of motor and sensory functions with HuCNS-SC cells in spinal cord injured immunodeficient mice, the recovery of sensory responses in patients with thoracic spinal cord injury, and the many other encouraging clinical and preclinical studies with these cells,” added Dr. Irv Weissman, a Director and co-founder.  “Given the collective strength of past data with these cells, we sincerely hope others will pick up the many questions we have about the variability of results seen in the Pathway Study.  Naturally, over the next few weeks, we will endeavor to find a party able to continue the development of this very promising technology, which is so important not only for current and future patients with these devastating diseases, but also for the field of brain stem and progenitor cell therapies.”

“We would like to thank the patients who participated in the Pathway Study as well as their families and caregivers. Spinal cord injury is one of the most devastating injuries to the central nervous system and any effort to help advance or investigate a potential therapy is worthwhile. The Company would also like to thank our clinical trial investigators and their teams, who have shared our mission in helping these patients. The Company will work with the clinical sites to suspend the trial activities and detailed information will be provided to patients in the trial regarding their participation,” concluded Dr. Huhn.

The Pathway Study

The Pathway Study was a single blind, randomized, controlled clinical trial investigating the use of the Company’s proprietary HuCNS-SC human neural stem cells for the treatment of chronic spinal cord injuries (SCI). Patients eligible for the study had complete loss of motor control below the level of injury, the most severe degree of SCI as defined by the American Spinal Injury Association Impairment Scale (AIS). Clinicians used both ISNCSCI (International Standards for Neurological Classification of Spinal Cord Injury) and GRASSP (Graded Assessment of Strength Sensibility and Prehension) measures to establish a pre-transplant baseline for each patient and to assess post-transplant progress. The goal of the Pathway Study was to demonstrate improved upper extremity motor function and fine motor skills.

Interim Analysis

In performing the interim analysis of Cohort II, an Interim Analysis Data Monitoring Committee consisting of three leading clinicians in the spinal cord injury field, reviewed the accrued data to date against specific clinically relevant criteria linked to achieving the statistically significant result for improving motor strength and function in treated patients. Following this analysis, the IA-DMC concluded that the data failed the futility criteria established for the interim analysis and recommended cessation of the study.  The Company took the IA-DMC’s recommendation under advisement in making its decision to terminate the Pathway Study.

Company to Initiate Orderly Wind Down

The Company also announced that, in light of the decision to terminate the Pathway Study, the Company’s available strategic alternatives and its current cash position, the Board of Directors approved a plan to wind down the Company.  As part of this process, the Company will evaluate opportunities to monetize its intellectual property, including data collected in its studies and trade secrets, as well as the transfer of its proprietary HuCNS-SC cells and other assets through a potential sale. The Company will not proceed with its earlier plans to conduct a rights offering, for which it had filed a registration statement with the SEC.

As of May 31, 2016, the Company had cash and cash equivalents of approximately$5.5 million. The Company cannot determine with certainty the amount of any liquidating distribution to its stockholders and it is possible that there will be no liquidating distribution to stockholders. The amount of any cash distributed to its stockholders will depend upon, among other things, the Company’s current liquid assets offset by its known and unknown liabilities as well as operating expenses associated with the wind down.

“We are extremely disappointed with the results of our Pathway Study, which we had hoped to be the first clinical program involving cellular transplantation to meaningfully improve motor function in patients with chronic spinal cord injury,” said Dr. Ian Massey, President and Chief Executive Officer. “However, we continue to feel immense pride over the contributions we have made to the stem cell research field, and we are confident that the progress we made will be instrumental in future studies in this area.  The other directors and I are also very appreciative of our employees for their hard work and dedication to our mission, and thankful to the scientific community and our stockholders for their support through the years.”

ISSCR 2016 Annual Meeting

The Company will attend the 14th Annual Meeting of the International Society for Stem Cell Research (ISSCR) in San Francisco, California, on June 23.  The Company will present Cohort I data from the Pathway Study and its interim analysis outcome. (Original Source)

Shares of StemCells closed last Friday at $3.03, up $0.06 or 2.02%. STEM has a 1-year high of $9.19 and a 1-year low of $2.45. The stock’s 50-day moving average is $3.10 and its 200-day moving average is $4.13.

On the ratings front, StemCells has been the subject of a number of recent research reports. In a report issued on May 10, Rodman & Renshaw analyst Ram Selvaraju reiterated a Buy rating on STEM, with a price target of $18, which implies an upside of 494.1% from current levels. Separately, on April 19, Maxim Group’s Jason Kolbert maintained a Buy rating on the stock and has a price target of $36.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ram Selvaraju and Jason Kolbert have a total average return of 1.2% and -14.1% respectively. Selvaraju has a success rate of 45.4% and is ranked #1425 out of 3891 analysts, while Kolbert has a success rate of 31% and is ranked #3889.

StemCells, Inc. engages in the research, development and commercialization of stem cell therapeutics and related tools and technologies for academia and industry. The company is focused on developing and commercializing stem and progenitor cells as the basis for novel therapeutics and therapies; and cells and related tools and technologies to enable stem cell-based research and drug discovery and development. StemCells research and development efforts are focused on identifying and developing stem and progenitor cells as potential therapeutic agents.