Dendreon blazed a new trail in late April when it won FDA approval of a treatment to actively stimulate a patient’s own immune cells to fight prostate cancer. Now lots of companies are casting themselves as the next Dendreon, with gee-whiz biotechnology on the verge of a breakout. One of them is Ann Arbor, MI-based Aastrom Biosciences (NASDAQ: ASTM).
There are plenty of reasons to be wary of companies grasping for Seattle-based Dendreon’s coattails—chief among them the fact that every cell-therapy company before Dendreon failed, and that none of the other contenders is trying to do just what the Seattle company does. In the case of Aastrom, its vital stats don’t inspire great confidence, either. The company was founded 20 years ago, hasn’t developed a marketed product, has racked up a deficit of more than $195 million, and today has a market valuation of less than $50 million. This is one of the biotech companies out there with a history it would like to forget.
“The good news is the company has been around 21 years, and the bad news is the company has been around 21 years,” says CEO Tim Mayleben. “We’ve survived.”
Aastrom has been able to survive the past few years on a couple technologies floated by a lot of hype—stem cells and cell therapies like the one from Dendreon. But quite a bit has been happening at Aastrom in the past few months, and the company is looking forward to an important presentation on June 11 at the annual meeting of the Society of Vascular Surgery in Boston. Aastrom is expected to present some positive—albeit preliminary—results from a small study that showed its injectable adult stem cell therapy was better than a placebo at delaying major complications for patients with a severe type of vascular disease known as critical limb ischemia.
Before diving into the data that’s expected and why it matters, a little background is required on Aastrom. The company was founded in 1989 as a University of Michigan spinoff. For the past five years, it has pursued a strategy of developing adult stem cell therapies for people with severe cardiovascular diseases.
Like Dendreon’s prostate cancer treatment, the Aastrom method is designed to be an “autologous” cell therapy, in which a patient’s own cells are processed outside the body and re-injected. It starts with a 15-minute procedure in which the patient has about three tablespoons of bone marrow withdrawn, Mayleben says. That bone marrow is then shipped to Aastrom’s Michigan facility where it is incubated for 12 days in a nutrient broth and with some specific gas conditions that are proprietary to the company. The controlled environment is supposed to help adult stem cells and progenitor cells, the kind involved in healing and tissue repair, to proliferate 30 to 300-fold. The new batch of stem and progenitor cells get re-injected directly into the muscle or tissue where they are supposed to promote healing.
Mayleben, 49, the former chief operating officer of Esperion Therapeutics, has been familiar with the Aastrom story since he joined the board in 2005. But he only formally took on the full-time job of CEO this past December. Since then, he raised almost an extra year’s worth of operating cash ($13 million), boosted the firm’s share price through a reverse split in which shareholders traded in eight of their shares for one each, and brought in a couple new senior managers on the development side.
The big thing Aastrom is looking forward to are results from a mid-stage trial among patients with critical limb ischemia. This condition, in which people get clogged blood vessels in the legs that choke off circulation, causes an estimated 160,000 amputations a year. Doctors sometimes use tiny stents to prop open blocked arteries in the legs, but they don’t always work, and about three-fourths of patients with the disease die within four or five years, Mayleben says.
Based on animal studies, Aastrom hopes to show that its treatment offers a new approach, by helping foster growth of new blood vessels to improve circulation. The company has been running the most rigorous clinical trial yet to suggest its treatment has promise. This study, called Restore-CLI, enrolled a total of 90 patients who were randomly assigned to the cell therapy or a placebo treatment.
Back in February, Aastrom said that its treatment reached the primary goal of the study in an interim analysis of the first 46 patients who went through six months of follow up. Researchers found that those on the Aastrom cell therapy were able to keep some of the most severe complications of their disease (amputations, large wounds, and gangrene) at bay for a longer period of time. Details of those results are expected to be presented at the Society of Vascular Surgery in Boston on June 11, Mayleben says. Before the end of this month, Aastrom hopes to meet with the FDA and get some feedback on what the next step of development—a Phase III clinical trial program—ought to look like to confirm this finding. By the end of 2010, Aastrom hopes to have the full set of data on all 90 patients, he says.
A lot of key questions will have to be hashed out with the FDA before people get too excited about this being a stem-cell breakthrough. What the study goals ought to be, how many studies are required, how many patients need to be enrolled are some of the big questions that the company will have to work out with the FDA. Aastrom knows that where there’s hype, skepticism will surely follow, so it will have some high hurdles to clear with the scientific community.
All that means Aastrom will have to work hard in the coming months and years to gather proof if it’s ever going to blaze a trail with a stem-cell therapy for severe vascular disease. The company currently has about 18 to 20 months of operating cash in the bank, by which time it should have more positive data rolling in to support a higher stock valuation, Mayleben says.
“We’ve been trying to distinguish ourselves with the science and rigor of Phase II studies. It’s been lacking a bit in the industry, because companies are often under-capitalized,” Mayleben says. “But it’s an exciting time for our company. We have a great opportunity.”
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