We had two stories yesterday, one on Aastrom (NASDAQ: ASTM) and one on PluriStem (NASDAQ: PSTI). Aastrom has started their phase III trial. PluriStem updated their progress on several trials including CLI.
Both companies are marching forward. Aastrom in a Phase III trial, Pluristem in a Phase II that they hope will morph into a Phase III (PII/III) trial and can be used as part of a registration package.
Here is how we read the Critical Limb ischemia indication:
- It’s a difficult indication to prove efficacy because the endpoint is amputation free survival (AFS). AFS itself is a very variable endpoint and not easy to predict with accuracy who will be amputated versus whose limbs can be saved.
- Aastrom ran a Phase II trial. The interim analysis showed great separation between the control (placebo) are and the active (cell / drug) arm. So much so, that ASTM halted enrollment early. Unfortunately when Aastrom looked at the data again, Phase IIb look, the placebo arm did better and there was not a statistically significant difference in AFS between the two arms. Too bad they got head faked by the first data look. The problem is what do they do now ? Run another Phase II trial or run a Phase III with lots of power (patients) to get statistical significance between the active and placebo arms. Answer: They are going for it. Time is money in biotech and its hard raising capital (that’s what been weighing on ASTM shares). So the cost to do a Phase II get great data, then run a phase III while less risky from a science viewpoint, is too long too expensive versus risk a large phase III and hope you hit your endpoint.
Aastrom Conclusion: This is a situation that investors hate being in, they have to gamble that the Phase II signal seen, will show up in a better powered phase III trial but these risks are now reflected in ASTM's low valuation. Investors now will have to own it and wait the 2 years for data that leads to the binary announcement, success or failure.
What about Pluristem (PSTI) ? They are smart enough to have learned from Aastrom’ s mistake. The plan is move forward with a well powered ?, well designed phase II trial with the goal of announcing both a stat. significant result and a morph to Phase III. In that way it may be possible (our opinion) for the PII plus the PIII to act as an approval package. Pluristem did imply in their letter to shareholders that the new facility will supply the CLI trial. The ramp up time for that to come on-line may be faster than people expect. If so it will help mute any time advanatge Aastrom now has.
- Given the PSTI PII/III goal one might conclude that Aastrom really does not have a significant time advantage versus pluristem (PSTI).
- Which product is cheaper? No question in our mind that PSTI's allogeneic, 3d-fermentation style product will be significantly less expensive to manufacturer. The hope is that these placental cells are unique and immuno-privledged and are "autologous" like in their properties versus Aastom's expanded autologous cells.
- Is there an engraphment advantage of auto versus allo? Yes, always there is But in CLI engraftment may not be the issue as it is in cardiology (heart repair). If the cells help vascularize a bad limb and go away, and patients can be re-treated multiple times (PSTI says yes they can, on retreatment they have not seen immune reactions) then auto may not have a keen advantage versus allow in CLI and COGS here could be the critical factor.
- What about the rest of the field? Investors should note that Cytomedix acquired Aldagen who is also hoping to kick of a Phase II trial. This will be with autologous cells but enriched for ALDH-br cells. It looks like this would be the third product to the marketplace and the most expensive, so can Cytomedix (CMXI) show an efficacy advantage over Aastrom or pluristem. We conclude that is very unlikely. Thermogenesis also had need recently about an adipose (fat derived) autologous (but cheap, bedside processed) product, also chasing CLI with a small proof of concept study in India.
Last Point: Its full speed ahead for both Aastrom and Pluristem in CLI. See our recent comments on both, but in weighing the products, the associated cogs, the indications, the cash on their respective balance sheets we conclude that PSTI is strongly positioned.