Aastrom ($ASTM) patient enrollment

Aastrom Biosciences (NASDAQ: ASTM) announces initiation of patient enrollment in REVIVE phase III trial of Ixmyelocel-T ($1.79):

• ASTM has begun patient enrollment in the REVIVE Phase 3 clinical trial to assess the efficacy and safety of ixmyelocel-T in the treatment of patients with critical limb ischemia (CLI).
• The primary endpoint of the trial will be amputation-free survival at 12 months.
• The REVIVE clinical trial has also been granted Fast Track designation by the FDA.

Daily Dose Conclusion: This is positive as the trial gets underway. Investors are concerned that the lack of a partner means Aastrom has to fund this trial alone, which will be expensive. The likely conclusion then is that Aastrom will need to raise additional capital. At this valuation however a good amount of that is likely factored into he share price. Other earlier players in CLI include Pluristem (PSTI), and Cytomedix - Aldagen (CMXI). We have also recently written on Thermogenesis (KOOL) working in the CLI space.

Medistem ($MEDS) Initiates Collaboration With Chinese Conglomerate Aimed at Clinical Development of Endometrial Regenerative Cells for Critical Limb Ischemia

Medistem Inc. (OTC: MEDS) announced today initiation of joint efforts with the Chinese conglomerate, Shanghai Jia Fu Medical Apparatus Inc, in developing the Endometrial Regenerative Cell (ERC) “universal donor” stem cell product for the Chinese market. The initial focus of the collaboration will be treatment of critical limb ischemia, an advanced form of peripheral artery disease.

Medistem has previously received FDA clearance to begin a Phase I clinical trial using the ERC stem cells in this patient population. A scientific publication providing the rationale and supporting data for utilization of ERC in treatment of critical limb ischemia may be found at http://www.translational-medicine.com/content/pdf/1479-5876-6-45.pdf.

Video on MediStem's Source of Cells:

Daily Dose Conclusion: Critical Limb Ischemia (CLI) is getting crowded. Aastrom (ASTM) is in the lead in the US with a P3 FDA trial in motion. With that said the market capitalization for Aastrom has fallen sharply as trial has been expanded and costs rising. Definitive Phase II data should have translated into a pharma partnership but the Phase IIB data read missed the primary endpoint as the AFS (Amputation free survival rate) of the control group fell (it was unusually high in the PIIa read-out). As such it seems that Aastrom has to go it alone now. Also aggressive in the CLI space is Pluristem (PSTI), Aldagen (now part of Cytomedix: OTC/BB:CMXI) and even device company Thermogenesis (KOOL) announced CLI data from a trial in India. We believe that in CLI COGS (cost of goods sold) and the ability to retreat patients will be significant factors.

Aastrom (ASTM) fall in market cap appears over-done at this point but smart investors will wait for a financing to be completed before jumping in. Data is at least 2 years away so there is no rush. Ditto for the other CLI players. In terms of Cytomedix we are very concerned that the strategy is flawed as Aldagen's product (ALDH-br cells) look expensive to make and are in early stages behind Aastrom and Pluristem. Is Cytomedix funded for a phase II CLI program ?  Stay tuned.

Aldagen Finds a Home: CytoMedix Acquires for $16 MLN in Stock

CytoMedix (OTCBB: CMXI) is set to acquire Aldagen, which is a private company that has been shopped on the street for the past year after two failed IPO attempts.

This is a stock deal valued at aproximately $16 million. Aldagen shareholders will own 17% of CMXI and will be eligible for milestones of up to 20+ million in Cytomedix stock, (valued at $28.4 million based on Cytomedix's close of $1.40 on Wednesday, before the deal was announced).

The company utilizes an ALDH-br bone marrow cell that is selected. Aldagen has P1 data from a Critical Limb Ischemia trial that looks fine (all P1-CLI data looks pretty good). The company is also pursuing a stroke indication and is treating the first group of n=10 patients in a P1a/b safety/efficacy (hint) study that they hope will morph into a P2 trial.  As part of the terms of the deal Aldagen's VC are making a $5 mln investment in Cytomedix (CMXI).

Cytomedix's lead product is the AutoGel system which is marketed to produce platelet-rich plasma (PRP) gel derived from a patient's own blood for use on a variety of exuding wounds. We have not in detail evaluated this transaction, and there will be a call in the morning.

Daily Dose Early Read: CLI is getting competitive and Aastrom (ASTM) is in the lead in a  Phase 3 pivotal trial with replicel. Pluristem (PSTI) is right behind with their allogeneic PLX cells. PSTI will have the lowest cogs and we expect because of the enrichment step for Aldagen that they will have the highest COGS. We are therefore concerned that Aldagen is likely the third player to market and with the most expensive product. Can efficacy in CLI be dramatically different between these three players and can it be proven ? That is a big question and only time and science will answer it, but we expect the answer will be no. Stroke is even more complex, requires very large trials and Athersys is pursuing it with MultiStem (low COGS, allogeneic).  CYMX will pick up Aldagen, their manufacturing and operations folks and this will increase their fixed and variable costs.  Its hard to see given the price paid how this works for CytoMedix shareholders.

Transaction Terms: (from press release): At the closing, Cytomedix issued 135,398 newly designated Cytomedix Series E preferred shares to Aldagen shareholders. Pro forma for the conversion of these shares to common stock, as set forth in the designations documents for the Series E preferred stock, Aldagen shareholders will own approximately 17.3% of Cytomedix common shares outstanding after the concurrent conversion and/or redemption of all existing Cytomedix preferred shares.

There are also contingent clinical milestone payments totaling up to 20,309,723 shares, which will be issued to Aldagen shareholders upon the achievement of predetermined clinical milestones associated with an ongoing Aldagen Phase 2 trial in post-acute ischemic stroke. Notably, 80% of this contingent consideration is issuable only upon a favorable clinical efficacy signal in the above-mentioned trial. The costs of the clinical trial will be funded, in part, by the $5.0 million investment made by Aldagen shareholders, $3.0 million in proceeds from completed or committed warrant exercises by existing Cytomedix shareholders, as well as a portion of Cytomedix subject to lockup restrictions ranging from six to 18 months.

As part of the transaction, as of the closing date three Aldagen Board members have joined the Cytomedix Board, which has been expanded to nine seats. They are Richard Kent, M.D., Chairman of the Board of Aldagen, Lyle Hohnke, Ph.D., Aldagen Del Guercio, Managing Director of CNF Investments and a current Board Observer for Aldagen. Concurrent with these additions, Craig Mendelsohn has stepped down from the Cytomedix Board.

In addition, Edward L. Field, Aldagen Operating Officer of Cytomedix. Aldagen is now a wholly owned subsidiary of Cytomedix and will retain manufacturing and product development facilities in Durham, N.C.

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