Athersys Jumps More Than 20% After FDA Approves MultiStem Coronavirus Study

Shares in Athersys, Inc. (ATHX) soared more than 20% in U.S. premarket trading after the biotech company announced that it was granted approval by the Food and Drug Administration (FDA) to start a pivotal clinical study of its stem-cell therapy on patients with COVID-19-induced acute respiratory distress syndrome (ARDS).

Following the FDA approval, Athersys said it plans this quarter to initiate a phase 2/3 pivotal study to determine the safety and efficacy of its MultiStem therapy in coroanavirus patients with moderate to severe acute respiratory distress syndrome. The study conducted among 400 individuals will be administered at leading pulmonary critical care centers throughout the U.S., the company announced. According to the World Health Organization (WHO) and other recent clinical and epidemiological data, ARDS is the leading cause of death among COVID-19 infected patients.

“We believe that MultiStem treatment, by modulating patients’ hyperinflammatory response to highly pathogenic respiratory viruses, including SARS-CoV-2 which causes COVID-19, represents a very promising approach to improving outcomes in patients who suffer the most severe manifestations of these illnesses,” said  Eric Jenkins, MD, Senior Medical Director and Head of Clinical Operations at Athersys. “We are in communication with FDA regarding the enrolment of further cohorts to conduct a scientifically rigorous evaluation of MultiStem’s safety and efficacy in the treatment of ARDS due to COVID-19.”

Athersys said it recently completed a Phase 1/2 study evaluating administration of its MultiStem therapy in patients with ARDS and based on the “promising data” from the study, the program was granted Fast Track approval by the FDA.

Athersys jumped more than 20% to as high as $3.71 in premarket trading on Monday. In March, Jason Kolbert, analyst at Dawson James raised Athersys 12-month price target to $12 from $11 while maintaining a Buy rating. Needham’s Chad Messer is less aggressive on potential upside for the company’s shares putting the price target at $6, while also holding on to a Buy rating. (See Athersys stock analysis on TipRanks).

At the end of March, Japanese drugmaker Healios piled up on another 4 million of Athersys’ stock at $1.76 a share, providing just over $7 million in new funding for the regenerative medicines company. Following the purchase, Healios’ equity stake in Athersys increased to 12 million shares, or about 9.4% of its outstanding stock.

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