Athersys: A Quick View

Athersys is lining up a number of catalysts over the next 12 months that could transform the investment case for the stem cell specialist. The key event in 2013 is headline data in Q3 from a Phase II study of its MultiStem product (allogeneic stem cells from adult bone marrow) for ulcerative colitis (UC), conducted by partner Pfizer. Further 2013 catalysts include: FDA authorisation of a Phase II/III trial of MultiStem in graft versus host disease (GvHD), and partnership(s) for the preclinical 5HT2c agonist programme in obesity/schizophrenia. In H114, Phase II data for MultiStem in ischaemic stroke could be a breakthrough event for Athersys.

Inflammatory Bowel Disease (IBD) Potential
A partner since 2009 for potential IBD applications of MultiStem, Pfizer is running a 126-patient Phase II study in moderate-to-severe UC (Mayo score >6) – adverse events, endoscopic valuation (Baron score) and the Mayo rectal bleeding sub-score are the primary endpoints. Positive data in H213 would provide important validation of the MultiStem approach (first ever Phase II data) and encourage Pfizer to conduct pivotal studies in UC and/or Crohn’s disease (deal = $105m milestones + royalties).

Multiple Shots On Goal
Athersys has successfully completed Phase I studies of MultiStem in acute myocardial infarction (AMI) and GvHD, with a design for a Phase II/III study in GvHD currently under FDA review. The 36-patient Phase I data in GvHD showed a positive impact on GvHD incidence (in a high-risk patient group) and other clinical measures (eg relapse free survival and infection rates). Meanwhile, a 140-patient Phase II study in ischaemic stroke is ongoing – results in H114 (adverse events and portion of patients with a modified Rankin Scale (mRS) score ≤2) could be transformational.

Partners Sought For Obesity Program
The FDA approval in 2012 of Arena’s obesity drug Belviq (lorcaserin) has renewed partnering optimism for Athersys’ small molecule 5HT2c agonist programme, for obesity and/or schizophrenia. Highly selective to 5HT2c (i.e. inactive on side-effect linked, off-target 5HT2a/b), a partnership may be secured in H113.

Valuation: $57.5m EV
With $25.5m in cash at end-2012, Athersys has an EV of $57.5m. We note some of its more advanced stem cell peers, Cytori and Pluristem, have respective EVs of $155m and $132m. Positive Phase II data for MultiStem in UC and ischaemic stroke should help Athersys narrow this valuation gap.

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