Company Update (NASDAQ:ATHX): Athersys, Inc. Reports Third Quarter 2015 Results

Athersys, Inc. (NASDAQ:ATHX) announced its financial results for the three months ended September 30, 2015.

Highlights of the third quarter of 2015 and recent events include:

  • Announced signing of a letter of intent with a Japanese company to collaborate on the development and commercialization of MultiStem® cell therapy for several indications in Japan, including ischemic stroke, after termination of the license agreement with Chugai Pharmaceutical Co., Ltd;
  • Advanced discussions with several other companies about collaborating in the development and commercialization of MultiStem therapy in multiple areas, including ischemic stroke;
  • Advanced planning for progressing MultiStem ischemic stroke program in Japan and globally, focusing on patients who receive treatment within 36 hours of stroke;
  • Progressed other clinical programs, adding sites to the Phase 2 acute myocardial infarction (“AMI”) trial and completing final preparations for launch of acute respiratory distress syndrome (“ARDS”) trial – studies that are partially supported with grant funding;
  • Reported revenues of $0.4 million for quarter ended September 30, 2015 and net loss of $6.5 million for the period, which includes non-cash income of $0.3 million related to the change in fair value of our warrant liabilities and non-cash expense of $0.7 million related to stock-based compensation;
  • Recorded net loss per share of $0.08 for the quarter ended September 30, 2015; and
  • Ended the quarter with $28.5 million in cash and cash equivalents.

“Although we have ended our collaboration with Chugai, we are encouraged by the interest of other potential business partners in our MultiStem programs and stem cell technologies,” said Dr. Gil Van Bokkelen, Chairman and CEO of Athersys, Inc.  “As announced previously, we recently signed a letter of intent with a Japanese company for the development of MultiStem cell therapy in Japan for several indications, including stroke, and we remain enthusiastic about accelerated development opportunities for regenerative medicine products in Japan, confirmed by recent approvals by the Japanese Pharmaceutical and Medical Devices Agency.  We also have ongoing discussions with companies with interests in applications outside of Japan.  Clearly, a key focus will be business development over the next several months.

“We are particularly excited about the potential for our ischemic stroke program, especially as continued analyses confirm a robust benefit for serious stroke patients who received MultiStem treatment within 36 hours following the stroke.  We are planning the next stage of clinical activity, which we intend to initiate by the middle of next year.

“We have also made progress in our Phase 2 acute myocardial infarction study and have added sites to help drive enrollment,” added Dr. Van Bokkelen. “Also, with recent regulatory and operations progress, we expect to launch our exploratory study in the ARDS area this quarter.  We believe that MultiStem therapy has the potential to moderate the hyper-inflammation associated with ARDS and help patients regain lung function, alleviate the need for ventilator-assisted breathing, and enable faster recovery.

“We have maintained a good balance sheet to support our current activities.  Additionally, as noted, we continue to focus on business development activities oriented to further improving the balance sheet, offsetting development costs, and bringing partner capabilities to bear for various development programs,” concluded Dr. Van Bokkelen.

Updated Phase 2 Ischemic Stroke Clinical Trial Results

The ongoing analyses confirm accelerated recovery for subjects treated with MultiStem prior to 36 hours compared to placebo.  Further, biomarker analyses demonstrate a significant reduction in acute post-stroke inflammation for MultiStem patients.  These factors may contribute to lower average hospitalization for subjects treated with MultiStem prior to 36 hours compared to placebo.

Additionally, our analyses show that patients treated with MultiStem prior to 36 hours tend to have better recovery across multiple functional and clinical outcomes as evident in Figure 1 below.  Patients receiving treatment with MultiStem within 36 hours have meaningfully better odds of achieving recovery – whether measured by single outcomes or considering recovery holistically across multiple outcomes – when compared with patients not receiving MultiStem treatment.  Considering the five dichotomous outcomes below, in the post-hoc analyses (subjects treated with MultiStem therapy < 36 hours v. all placebo, excluding subjects receiving prior tPA and mechanical reperfusion treatment from both groups), 41% of MultiStem patients successfully achieved each of the five outcomes compared to only 12% of Placebo patients.

Figure 1

Plot showing the odds ratios for a MultiStem-related treatment effect for the outcomes indicated.  Numbers greater than 1 are in favor of MultiStem.  Each horizontal line represents the 95% confidence interval.

Figure 1 includes three pre-specified secondary endpoints – modified Rankin Score ≤ 2 (disability measure), NIH stroke scale (NIHSS) delta ≥75% (neurological deficit), and Barthel Index ≥ 95% (activities of daily living) at 90 days following the stroke – and the pre-specified primary endpoint using the “generalized estimating equation (GEE)” method to calculate an integrated assessment of treatment effect between the groups using these three outcomes.  An exploratory endpoint, “Global recovery,” a combined dichotomous endpoint based on the simultaneous achievement of the three component endpoints above (mRS≤2, NIHSS delta≥75%, and BI≥95%) is included. Excellent outcome, a combined dichotomous endpoint measuring achievement of mRS≤1, NIHSS≤1, and BI≥95% and a pre-specified secondary outcome, is also shown.   Finally, two important safety outcomes are represented – survival without life threatening adverse events and secondary infections – and all five components are evaluated together using the approaches above.

Third Quarter Financial Results

For the three months ended September 30, 2015, total revenues were $0.4 million compared to $0.3 million in the comparable period in 2014, reflecting an increase in grant revenues. Grant revenues may fluctuate from period to period due to the timing of grant-related activities and the award and expiration of grants, while contract revenues will be driven by license, royalty and milestone payments from existing and new business collaborations.  We will retain the $10 million up-front cash payment from Chugai Pharmaceutical Co. Ltd. (“Chugai”) received in 2015, which will be recognized in full as revenue in October 2015 in connection with the recently announced termination of the collaboration.

Research and development expenses were $5.1 million for the third quarter of 2015 compared to $5.8 million for the third quarter of 2014.  The decrease was driven by lower clinical and preclinical development costs, sponsored research costs, personnel costs, research supplies and travel costs. General and administrative expenses increased to $1.9 million in the third quarter of 2015 compared to $1.7 million in the same period of 2014 due to increased professional fees and consulting costs.  The non-cash income from the change in the fair value of our warrant liabilities was $0.3 million in the third quarter of 2015 and $2.5 million in the comparable prior-year period.

Net loss for the three months ended September 30, 2015 was $6.5 million, which included non-cash income of $0.3 millionfrom the warrant valuation and non-cash expense of $0.7 million from stock-based compensation, compared to net loss of $4.7 million for the three months ended September 30, 2014, which included non-cash income of $2.5 million from the warrant valuation and non-cash expense of $0.7 million from stock-based compensation.

As of September 30, 2015, we had $28.5 million in cash and cash equivalents, compared to $26.1 million at December 31, 2014.  Cash used in operating activities during the third quarter of 2015 was $3.7 million (including the receipt of $2.0 millionthat was temporarily withheld by Japanese taxing authorities related to Chugai) compared to $6.2 million cash used in the third quarter of 2014. (Original Source)

Shares of Athersys closed today at $1.08, up $0.03 or 2.86%. ATHX has a 1-year high of $3.43 and a 1-year low of $0.90. The stock’s 50-day moving average is $1.14 and its 200-day moving average is $1.19.

On the ratings front, Piper Jaffray analyst Edward Tenthoff downgraded ATHX to Hold, with a price target of $1, in a report issued on July 9. The current price target represents a potential downside of 5.7% from where the stock is currently trading. According to, Tenthoff has a total average return of 10.1%, a 46.7% success rate, and is ranked #584 out of 3824 analysts.

Athersys Inc is a biopharmaceutical company developing regenerative medicine. It is engaged in the discovery and development of therapies designed to extend and enhance human life.


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