Safe Stem Cell Therapy for Healing Is Still a Strong Bet

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MultiStem cell therapy being developed by Athersys (NASDAQ: ATHX) has excited people because of the advantages and sophistication levels it possesses over existing stem cell therapies. Big pharma is betting on this new therapy; let us find out why.

MultiStem – not a cure-all but a relatively potent therapy

The popular belief is that since stem cell therapy is a cure-all therapy as it involves removing and replacement of the malfunctioning cells stem cell therapy – the root cause of disease. That, however, is a myth – MultiStem therapy involves repair and not replacement. These cells are programmed in a way that after administration, they reach the site of inflammation/damage and promote healing and repair in a variety of ways.

MultiStem, a new allogenic stem cell therapy being developed by Athersys, reduces damage and enhances functional recovery after an ischemic stroke. In a study presented at the American Heart Association International Stroke Conference, it was illustrated that MultiStem cells limit the “inflammatory cascade” resulting from the initial stroke, which reduces the secondary damage that occurs later.

According to the American Heart Association (AHA), out of 2 million individuals suffering a stroke each year in U.S., Japan, and major European countries, 800,000 belong to the U.S. A vast majority (85%) of these is ischemic or caused by blockage of blood flow to the brain, the result of a clot or thrombus.

MultiStem will be competing with thrombolytic tPA, the only FDA approved clot-dissolving drug for patients with ischemic stroke. Thrombolytic tPA is effective only in about 5% of the cases due to the short treatment window, as it must be administered within several hours of the occurrence of the stroke. MultiStem has demonstrated advantage over tPA in the sense that it can bring about significant repair even a day after the stroke event.

Phase I primarily involved trials for safety and dosage determination and showed encouraging results. After having obtained authorization for cardiovascular trials, the company has now approached the FDA for phase II and III trials.

Big Pharma bets on MultiStem

A big positive for Athersys is Big Pharma’s support in its therapy development efforts, which showcases the high commercial potential of the therapy. The company has forged a partnership with Pfizer for developing the MultiStem treatment for inflammatory bowel disease (IBD). RTI Biologics, a small but leading developer, has partnered to help develop MultiStem for use in orthopedic treatment along with a bone allograft.

Considering the promise shown by MultiStem in treating multiple disorders, it is very likely that other big pharmaceutical companies engaged in treatment of inflammatory and related diseases will come forward and partner Athersys for finding new uses.


Osiris Therapeutics (NASDAQ: OSIR), a developer of stem cells for treatment, also uses adult stem cells for developing treatments. Osiris has fared well in terms of revenue increase over the past year. It generated $7.8 million in revenues in 2012, a 520% increase over prior year. The company received marketing approval for its stem cell therapy, Prochymal, in May last year. However, it is allowed to be marketed only in Canada and Norway only for children.

Cytori Therapeutics (NASDAQ: CYTX) uses adult adipose-derived (adipose cells refer to fat cells) stem cells for regenerative medicine. The company’s product, Puregraft 850, was approved by the FDA last year in March for use in body contouring. The company is also currently running trials to establish the efficacy of their therapy developed for patients suffering from heart failure due to reduced blood flow.

Cytori was also awarded a contract by BARDA, a division of the U.S. Health and Human Services, worth about $106 million for developing thermal burns and radiation injury treatment. The company’s annual revenue for FY 2012 was $14.5 million. The company, however, is currently operating at a loss and needs a huge jump in revenue to transition to profit.

Advantage over competitors

MultiStem, which is developed from human bone marrow cells, is being tested for treatment of a large number of diseases. Both Osiris and Cytori do not have such a base technology ready to implement in developing their products for large number ailments. Also, MultiStem can be used to culture millions of off-the-shelf doses from one donor, whereas Osiris can produce about 10 times less than those with mesenchymal stem cells (the cell type it uses to develop its products).


MultiStem has a unique property of expansion of material taken from bone marrow of a single individual to create enough material for treating thousands of patients. Moreover, there is no need of using immunosuppressive drugs even when taken from an unrelated donor as it does not trigger an immune response on administration. Considering these features, along with the fact that cells can be preserved for five years or more with cryopreservation, MultiStem is likely to be available off-the-shelf. 

Athersys has discovered an important type of stem cell therapy that has great commercial potential, as well as the likelihood of being accepted by patients and doctors as replacement of small molecule therapies in disorders involving inflammation. Given the large market for inflammation, Athersys and the interest shown by a biotech giant like Pfizer is evidence of the potential of MultiStem therapy becoming a commercial success.

Results of phase II trials in refractory ulcerative colitis are expected to be reported by Athersys’ partner Pfizer, whereas results of phase II trials in ischemic stroke are expected by Q1 or Q2 2014. While the possibility of positive data from these trials is great, there is also a lurking doubt as animal studies do not always reflect similar results in humans.

Investment in early stage biotech companies has its own risks. However, the potential for reward is much greater in case of positive results. In this case, there is a reasonable chance of that occurring. Athersys looks poised for future success with a good scope for appreciation. It is a good candidate for a buy given its unique treatment platform.

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This article is written by Shilpi Ghosh (BS, UCLA, MS in Biomed, Cal Poly, MBA in Finance, IIFT) and edited by Shas Dey, StockRiters' Editor-in-Chief. Neither StockRiters nor any of its Directors or employees have any position in any stock mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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