Miami, FL – November 20, 2018 ( NewsWire) —, a leading independent small cap media portal with an extensive history of providing unparalleled content for the Emerging Growth markets and companies, reports on Athersys, Inc. (NASDAQ: ATHX)

Athersys, Inc. (NASDAQ: ATHX)is one of the few micro-cap biotech stocks that has performed well in spite of severe pressures facing the broader industry. Shares of the company have moved about 12% year to date, and have recovered 40% from its lows in March.


Athersys focuses on research and development activities in the field of regenerative medicine. Its clinical development programs are focused on treating neurological conditions, cardiovascular diseases, inflammatory, immune disorders, and pulmonary and other conditions.

The company’s lead platform product, MultiStem,  is currently in advanced stages of clinical testing for patients who have suffered an ischemic stroke.

MultiStem cell therapy is a patented biologic product that is manufactured from human stem cells obtained from adult bone marrow, and may alternatively be obtained from other tissue sources.

Unlike traditional bone marrow transplants or other stem cell therapies, MultiStem cells may be manufactured on a large scale and administered without tissue matching or the need for immune suppression, analogous to type O blood.

Investment rationale

Strokes are major causes of long-term disability, institutionalization, and death, and remain a serious global health problem. According to some researchers, when considered separately from other cardiovascular diseases, strokes rank third among all causes of death, following diseases of the heart and cancer.

More than 795,000 people in the United States have a stroke every year with about 610,000 of these cases being a first time occurrence.

Approximately 87 percent of all strokes are ischemic strokes which occur as a result of an obstruction within blood vessels supplying blood to the brain. The only currently approved FDA treatment is Roche Holding, Ltd.’s  (OTC: RHHBY)Activase, a tissue plasminogen activator.

About 15 to 30 percent of stroke survivors are permanently disabled and 20 percent require institutionalized care three months after the stroke occurs. Bearing this in mind, there is no denying the significant economic impact strokes impose.

As a matter of fact, a 2009 report from the American Heart Association Statistics Committee and Stroke Statistics Subcommittee, estimated that the direct and indirect cost of strokes in the United States was $68.9 billion.

According to recent research, revenue from drugs in the ischemic stroke market were approximately $7.2 billion in 2017 with the U.S being the largest market, accounting for 47 percent of all sales. The top selling drug, Roche Holding, Ltd.’s Activase generated $1.2 billion in sales in FY2017.

Following reports that the cost of Activase increased by 111 percent between 2005 and 2014 with no clear reason i.e. from about $30.50 per mg in 2005 to $64.30 in 2014, there appears to be a huge opportunity for Athersys, Inc. (NASDAQ: ATHX)in more ways than one.

Athersys’ MultiStem cell therapy has the potential to upend the current ‘Gold Standard’ for the treatment of ischemic strokes.


(Source: ATHX Investor Presentation 2018)

Ischemic Stroke:Athersys, Inc. (NASDAQ: ATHX)completed the Phase 2 study of MultiStem treatment of patients suffering moderate to severe ischemic strokes and announced the one-year follow-up data and final results from the study in February 2016. The study results demonstrated favorable safety and tolerability for MultiStem, consistent with prior studies.

According to a press release by the company, “with respect to primary and secondary endpoints the cell therapy did not show a difference at 90 days compared to placebo. However, MultiStem treatment was associated with lower rates of mortality and life threatening adverse events (AEs), infections and pulmonary events.

Furthermore, post-hoc analysis shows that patients who received MultiStem treatment earlier in the treatment window had more robust recovery rates in comparison to placebo and relative to patients who received later MultiStem treatment.”

In September 2016, Athersys announced that it had received an agreement from the FDA under a Special Protocol Assessmentor SPA for the design and planned analysis of a pivotal Phase 3 clinical trial of MultiStem cell therapy for the treatment of ischemic stroke.

The SPA provides an agreement from the FDA that the protocol design, clinical endpoints, planned conduct and statistical analyses encompassed in Athersys’ planned Phase 3 study are acceptable to support a regulatory submission for approval of MultiStem for treating ischemic stroke patients.

In May 2017, the FDA granted Athersys, Inc. (NASDAQ: ATHX)Fast Track designation for MultiStem cell therapy for the treatment of ischemic stroke.

Since then, the company has been actively engaged in advancing the next stage of clinical development of this program, independently and with one of its key partners, Healios after Japan’s Pharmaceutical and Medical Devices Agency (PMDA) successfully completed a review of the Clinical Trial Notification (CTN) for MutiStem.

In accordance with the regulatory system in Japan, a CTN is equivalent to an Investigational New Drug (IND), application under the regulatory system used in the U.S.

Healios’ ongoing clinical trial, (TREASURE), is evaluating the safety and efficacy of the administration of MultiStem cell therapy for treating ischemic stroke in Japan, and results will be evaluated under the new regulatory framework for regenerative medicine therapies.

The study will evaluate patient recovery through approximately 90 days following initial treatment. Primary outcome measures will assess disability by examining the distribution of modified Rankin Scale (mRS) scores [scale range = 0 to 6].

Based on the experience from prior studies, subjects enrolled in the trial will receive either a single dose of MultiStem or placebo, administered within 18–36 hours of the occurrence of the stroke, in addition to standard of care. This is perhaps one of the most important points for investors to take note of.

If the trial is successful, Athersys believes the results from the Phase 3 (MASTERS-2) clinical trial, together with other available clinical data, would provide the foundation of the regulatory package to be submitted for marketing approval.

Athersys, Inc.’s (NASDAQ: ATHX) MutliStem seems set to disrupt this market, thanks to the fact that this treatment can be administered within a longer window of time compared to the existing standard.

Roche Holding, Ltd.’s  (OTC: RHHBY) Activase has to be administered within 4.5 hours after the stroke occurs, which effectively locks out a huge number of patients from its benefits, thus Athersys, Inc.’s (NASDAQ: ATHX) MutiStem will cater to a much larger patient population.

Acute Myocardial Infarction:Athersys, Inc. (NASDAQ: ATHX)has an ongoing Phase 2 clinical study in the United States for the administration of MultiStem cell therapy to patients that have suffered an AMI following a successful Phase 1 clinical study.

The results of this study demonstrated a favorable safety profile and encouraging signs of improvement in heart function among patients that exhibited severely compromised heart function prior to treatment.

This data was published in a leading peer reviewed scientific journal, and one-year follow-up data suggested that the benefit observed was sustained over time.

In 2013 Athersys was awarded a grant for up to $2.8 million in funding to support the advancement of this clinical program. The company is currently enrolling patients in the Phase 2 clinical study, evaluating the safety and efficacy of MultiStem treatment in subjects who have a non-ST elevated myocardial infarction.

Acute Respiratory Distress Syndrome:Athersys, Inc. (NASDAQ: ATHX)also initiated a clinical study for the treatment of ARDS in the United Kingdom and in the United States. In 2015, it was awarded a grant from Innovate UK for up to approximately £2.0 million as partial support of a Phase 1/2 clinical study evaluating the administration of MultiStem cell therapy to ARDS patients.

ARDS is a serious immunological and inflammatory condition characterized by widespread inflammation in the lungs that severely compromises pulmonary function, requiring patients to be placed on a ventilator. ARDS can be triggered by pneumonia, sepsis, or other trauma and represents a major cause of mortality in the critical care setting.

Hematopoietic Stem Cell Transplant / GvHD: The company completed the Phase 1 clinical study of administration of MultiStem cell therapy to patients suffering from leukemia and certain blood-borne cancers in which patients undergo radiation therapy and then receive a hematopoietic stem cell transplant.

Such patients are at significant risk for serious complications, including GvHD an imbalance of immune system function caused by transplanted cells that trigger an attack against various tissues and organs in the patient.

Data from the study demonstrated the safety of MultiStem cell therapy in this indication and suggested that the treatment may have a beneficial effect in reducing the incidence and severity of GvHD, as well as providing other benefits. The company was granted orphan drug designation by the FDA and the EMA, for MultiStem treatment in the prevention of GvHD.

In 2015, the MultiStem product was granted Fast Track designation by the FDA for prophylaxis therapy against GvHD following hematopoietic cell transplantation. Subsequently, the registration study design received a positive opinion from the EMA through the Protocol Assessment/Scientific Advice procedure.

In addition to this, the proposed registration study received Special Protocol Assessment designation from the FDA in December 2015, meaning that the trial was adequately designed to support a biologics license application (BLA), submission for registration if it became successful.


According to a report published by Transparency Market Research, the global stem cell market is expected to reach $270.5 billion by 2025, increasing at a compounded annual growth rate of 13.8 percent during the period from 2017 to 2025.

As such, there are a number of companies that are actively developing stem cell products, which encompass a range of different cell types, including embryonic stem cells, umbilical cord stem cells, adult-derived stem cells and processed bone marrow derived cells.

For instance, Mesoblast Limited (NASDAQ: MESO)is currently engaged in clinical trials evaluating the safety and efficacy of Revascor, an allogeneic stem cell product based on mesenchymal stem cell precursors that are obtained from healthy consenting donors. These cells also appear to display limited expansion potential and biological plasticity (ability to form a range of cell types).

Other public companies such as Sangamo Therapeutics (NASDAQ: SGMO)and Johnson & Johnson (NYSE: JNJ), which are far better capitalized than Athersys are also developing a number of different stem cell related therapies which illustrating the increasing focus by big pharma on this treatment method.

Sangamo has a rich clinical pipeline and collaborations with other leading pharma companies such as Pfizer (NYSE: PFE), developing gene therapy to treat ALS while Johnson & Johnson has been working on using stem cells to reverse heart attack damage.

Financials and valuation

For the third quarter of 2018, revenues increased to $2.3 million compared to $0.4 million for the third quarter of 2017. It is important to note that Athersys currently derives its revenue from license fees, manufacturing-related activities for Healios, royalty and related contract revenue from its collaborations, and grant revenue.

Healios reimburses Athersys for a portion of the clinical product manufacturing cost for their TREASURE trial, and further reimburses the company for all of its technology transfer costs in Japan. However, Athersys is not yet profitable and net loss for the period came in at $9.7 million, or $0.07 loss per share.

Research and development expenses increased to $9.5 million for the three months ended September 30, 2018 from $5.4 million for the comparable period in 2017. The $4.1 million increase was primarily associated with increased clinical development costs.

General and administrative expenses also rose to $2.6 million for the three months ended September 30 from $2.1 million in the comparable period in 2017 mainly driven by an uptick in professional and consulting fees.

Cash and cash equivalents were $48.0 million at the end of the third quarter with only $13.7 million in current liabilities. Furthermore, Athersys, Inc. (NASDAQ: ATHX)has zero-debt on its balance sheet and has roughly 140 million shares outstanding.

(Source: Simply WallSt)

Athersys’ valuation of approximately $270 million appears cheap as the market hasn’t fully priced in the likelihood of MultiStem’s success in the ongoing clinical trials. According to our conservative estimates, if MultiStem manages to capture even a quarter of Activase’s market share ~$250 million, this could translate into massive upside potential for the stock.

Historically, biotechs have been valued at about 3X the peak annual sales of the company’s lead candidate which implies that shares of the stock could more than double over the course of the next 24 months when the results of the ongoing clinical trials are released.

This is in line with Wall Street analysts who have issued ratings and price targets for Athersys in the last 12 months. Their average twelve-month price target is $6.00, suggesting that the stock has a possible upside of 219.15 percent.

In conclusion, Athersys, Inc. (NASDAQ: ATHX)has a bright future ahead even without taking into account the probability of MultiStem expanding its treatment indications from ischemic stroke only. Currently, investors have an opportunity to get in at the ground stages of this impressive biotech concern at a reasonable valuation with considerably limited risk.

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