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By Jason Napodano, CFA

This article is about cerebrovascular accident (CVA), or as it is more commonly referred, stroke. There are two small biotech companies targeting treatment of stroke with cell therapy that we discuss below: Cytomedix (OTCQX:CMXI) and Athersys (ATHX). The goal of this article is to introduce investors to the core technologies at each firm, outline each of their clinical trials currently underway in stroke, and provide a brief conclusion as to why we think cell therapy may offer hope where others have failed.

Background Information On Stroke

A stroke occurs when the blood supply to part of the brain is interrupted or severely reduced, depriving brain tissue of oxygen creating cerebral hypoxia. The hypoxia may be diffuse, focal, or global. Regardless of the size, brain tissue deprived of oxygen can become damaged in as little as three minutes. Damage enough brain cells and the result is permanent disability or death. Therefore, stroke is a medical emergency that requires immediate attention and possibly long-term care.

The National Stroke Association (NSA) estimates approximately 800,000 strokes will occur in the year 2013. That's one every 40 seconds. In the U.S., stroke is the fourth leading cause of death, killing over 133,000 people each year. There are an estimated 7+ million stroke survivors in the U.S. over the age of 20 in the U.S. On a global basis, stroke occurs in roughly 15 million individuals per year. There are two types of stroke:


Source: FloydMemorial.com

- Ischemic stroke: Occurs when arteries are blocked by blood clots or by the gradual build-up of plaque and other fatty deposits. The NSA estimates approximately 87% of all strokes are ischemic. Within ischemic stroke, the event can occur essentially two ways, embolic or thrombotic.

An embolic stroke occurs when a blood clot forms somewhere in the body and travels through the bloodstream to the brain. Once inside the brain, the clot eventually travels to a blood vessel small enough to block its passage. The clot lodges, blocking the blood vessel (embolus) and causing a stroke.

A thrombotic stroke occurs when blood flow is impaired because of a blockage to one or more of the arteries supplying blood to the brain (thrombosis). Thrombotic strokes may occur as a result of unhealthy blood vessels clogged with a buildup of fatty deposits and cholesterol. Two types of thrombosis can cause stroke: large vessel thrombosis and small vessel disease (or lacunar infarction.)

- Hemorrhagic stroke: Occurs when a blood vessel in or around the brain breaks. Hemorrhagic strokes account for 13% of all strokes, yet are responsible for more than 30% of all stroke deaths. The onset of a hemorrhagic stroke is sudden, with potentially dire consequences.

An intracerebral hemorrhage (ICH) is the most common type of hemorrhagic stroke, and occurs when a blood vessel inside the brain ruptures and leaks blood into the surrounding brain tissue. This is known as an intra-axial hemorrhage. The hemorrhage can be intraparenchymal (inside the parenchyma) or intraventricular (into the ventricular system).

An extra-axial hemorrhage is different from an intra-axial hemorrhage in that the bursting vessel is still inside the skull, but outside the brain. Often these types of stroke are the result of a ruptured aneurysm. The main types of extra-axial hemorrhage are epidural hematoma (bleeding between the dura mater and the skull), subdural hematoma and subarachnoid hemorrhage (SAH). SAH is the most common form of extra-axial hemorrhage, and occurs between the arachnoid mater and pia mater.

...Treatment Options...

We are already several paragraphs into this article and we haven't mention any company or technology, so we'll skip over the pathophysiology, diagnosis, prevention, and identification of risk factors, and move directly into treatment options and management of patients post-stroke. We will focus this article on the management and treatment of patients post ischemic stroke, because that is where Athersys and Cytomedix are focusing their clinical trials.

As noted above, stroke is a serious medical emergency. Even small strokes, known as transient ischemic attacks (TIA) require serious and immediate medical attention -- time is of the essence. The goal of the stroke treatment is to quickly restore blood flow to the brain and minimize tissue damage that could cause long-term disability. Approximately 2.0 million brain cells die each minute without oxygen. Removing the blockage that is causing the ischemia is paramount. This can be accomplished by breaking down the clot with drugs (thrombolysis) or by removing it surgically (thrombectomy).

With respect to thrombolysis, standard-of-care includes several medications, with the most common being acetylsalicylic acid (aspirin). Other blood-thinning drugs, such as heparin, also may be given, but this drug isn't proven to be beneficial in the emergency setting so it's used infrequently. Aspirin remains the backbone, along with clopidogrel (Plavix), warfarin, and extended release dipyridamole.

The only FDA-approved medication for the treatment of acute stroke is a recombinant tissue plasminogen activator (tPA) called Activase. Other tPA's include alteplase, reteplase, and tenecteplase. The utility of Activase remains in question. There have been twelve studies evaluating the use of tPA in acute ischemic stroke. Some of these studies showed improvement in neurological outcomes. Others showed improvement in functional outcome. However, data also shows an increased risk of substantial brain hemorrhage as a complication from being given tPA. The largest and most recent study, called International Stroke Trial-3, showed no benefit but in post-hoc analysis found some subgroups who may benefit.

In the U.S., the window of administration is up to 4.5 hours after symptom onset. Data suggest tPA appears to show benefit not only for large artery occlusions but also for lacunar strokes. However, as we note above, since tPA dissolves blood clots, there is risk of hemorrhage with its use. Therefore, patients must be confirmed with MRI to have an ischemic stroke with low-risk of hemorrhage before tPA use. It is for this reason that the American Academy of Emergency Medicine believes there is insufficient evidence to warrant its classification of tPA as standard of care. Accordingly, only around 2% of all stroke patients receive tPA, leaving some 680,000 patients that could benefit from a new treatment paradigm.

Once the patient has been stabilized, long-term care post ischemic stroke includes management of risk factors that contributed to the stroke and rehabilitation. Rehabilitation may include transfer to an in-patient rehabilitation program, or stroke unit. These programs typically include an interdisciplinary team of physicians, nurses, physical therapists, occupational therapists, speech and language pathologists, psychologists, and recreation therapists. Other times patients may be recommended for out-patient services or home-based care. Regardless, the primary goals of this post-acute phase of recovery include preventing secondary health complications, minimizing impairments, and achieving functional goals that promote independence in activities of daily living.

The initial severity of impairments and individual characteristics, such as motivation, social support, and learning ability, are key predictors of stroke recovery outcomes. Responses to treatment and overall recovery of function are highly dependent on the individual. Current evidence indicates that most significant recovery gains will occur within the first 12 weeks following a stroke. Based on sources that include the NDA, NIH, and CDC, we estimate the direct and indirect cost of stroke in the U.S. is roughly $75 billion.

Where Others Have Failed...

Stroke is a complex medical event with varying manifestations of symptoms that occur in both the acute and chronic phases. The acute injury may last only minutes, but can trigger a cascade of events that create chronic conditions that can last weeks, months, or even years. Because of these far-reaching implications, treatment options should be tailored to various stages of the disease. Below is chart taken from work published by Sinden et al., in the July 2012 (Vol.7, Issue 5:426-434) International Journal of Stroke showing the time windows for treatment opportunity in stroke.

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As described above, the initial stage of stroke results from the direct and indirect effects of depriving neurons of oxygen and glucose. Blood flow, normally 60 milliliters per minute per 100 g of brain tissue, falls by as much as 90% at the core of the ischemic area. These cells die within minutes. In a wider area, known as the penumbra, blood flow is reduced to a lesser extent and cells become quiescent in an effort to conserve energy. Some of these cells will survive if blood flow is quickly restored. Others will die due to the "ischemic cascade" that arises from the temporary deficit of oxygen and glucose. Cells within this zone lose the ability to maintain their normal transmembrane ion gradient, resulting in the release of large quantities of glutamate and other neurotransmitters. Glutamate saturates its receptors on nearby neurons resulting in the uncontrolled influx of calcium into cells. This activates a variety of internal biochemical pathways that are ultimately toxic to the cell. Simultaneously, mitochondria within the cell lose their transmembrane gradient and begin to release free radicals. In a second stage of neuronal loss, the release of cellular debris and pro-inflammatory substances from these dying cells initiates an inflammatory process that leads to further loss of neurons. Astrocytes and microglia, which normally serve housekeeping and immune functions within the CNS, begin to release free radicals, proteases, and other toxic molecules. Signaling molecules released by the dying cells recruit peripheral immune cells including neutrophils and macrophages to the site of the infarction. These recruitment and activation of these cells exacerbate tissue damage via the release of free radicals, proteases, and other cytotoxic molecule, as well as by further occluding blood flow, by further disruption of the blood-brain barrier, and by scar tissue formation. A recent review cites over 100 clinical trials that have been performed examining the ability of compounds that potentially inhibit the toxicity pathways described above. These include antagonists of various glutamate receptor subtypes, calcium channel blockers, sodium and other ion channel blockers, and free radical scavengers. To date, none of these neuroprotective strategies has met with success in the clinic in spite of favorable data in animal models. It is safe to say, stroke has been a minefield for drug development over the past decade. Small molecules and biologics tested in late-stage trials for acute ischemic stroke - eliprodil, selfotel, aptiganel, enlimomab, LeukArrest, nimodipine, fosphenytoin, maxipost, tirilazad, citocline, disutenton, diazepam, repinotan, nalmefene, and gangloside-GM1 to name a few - have all failed for one reason or another.

In many cases failure appears to have arisen at least in part because trial sponsors set unrealistically wide time windows for drug administration after the onset of stroke. The mechanism of action for many of these agents likely requires administration within 3 hours of the initiation of ischemia, but sponsors felt that such a requirement would be impractical from a trial design or commercialization standpoint. In other instances, the agents may have interfered with the body's own inflammatory response - which may be by design or by accident - negatively affecting the outcome. Not all researchers agree on whether or not the body's inflammatory response post stroke should be targeted. Patient baselines during the acute and sub-acute phase of the event are varied and subject to wide standard deviations, even among the same patient take at 4, 24, or 48 hours post event. Inconsistent baselines signify doom for most clinical trials. Many other agents simply had the wrong or too narrow a clinical target to affect positive outcomes.

As such, no drugs directed at reducing neuronal loss arising from the inflammatory response have shown success in pivotal clinical trials. As the loss of cells from the inflammatory response is believed to occur over several days, it seems unlikely that these failures arose from the timing of drug administration. These failures may reflect the suppression of both detrimental and beneficial aspects of the inflammatory response by the non-selective agents examined in the clinic to date.

Protective aspects of the immune response that would ideally be preserved by a treatment targeting the post-stroke inflammatory process include the release of cytoprotective agents by activated astrocytes and microglia, and immunomodulatory, tissue activated astrocytes and microglia release a variety of cytoprotective agents, including nerve growth factor, brain-derived growth factor, transforming growth factor beta-1, and insulin-like growth factor. Likewise, certain macrophages exert an immunomodulatory effect and assist with tissue remodeling and wound healing. Broadly immunosuppressive approaches would be expected to suppress the protective as well as the detrimental aspects of the inflammatory process.

…Stem Cell Therapy Offers Hope...

Stem cells have the capacity to self-renew and to differentiate into multiple cell lineages. These can be divided into two groups based both on their source and differentiation ability.

- Embryonic stem cells are pluripotent and are isolated from human blastocytes. While these cells are able to differentiate into any type of cell in the body, they have not found clinical applications due to concerns about teratoma formation.

- Adult stem cells are multipotent stem cells that are present in various organs of adults, including bone marrow and brain. These have limited ability to differentiate, and have a general reputation for safety based on a long history of use in bone marrow transplant for the treatment of hematological malignancy. Adult stem cells are generally suitable for either autologous or allogenic use without immunosuppression, as they lack surface MHC markers.

While public perceptions of stem cells largely involve applications involving the replacement of damaged tissue, the most advanced applications have involved applications in which the implanted cells remain only for a short period of time, during which they release growth factors and other factors that modify the behavior of nearby tissue.

In the US, one of the most clinically advanced stem cell product is an autologous preparation of CD34+ cells in development by Baxter (BAX) for the treatment of angina. The Baxter protocol involves treating the patient with G-CSF to mobilize the CD34+ cells from bone marrow into the bloodstream. The cells are then collected and injected into poorly perfused areas of the heart to promote better blood flow. In a 157-patient double blind randomized Phase II trial, this protocol provided a statistically significant improvement in angina episode frequency and exercise tolerance compared to patients treated with a sham injection. The safety and efficacy of this procedure is currently being evaluated in a Phase III trial.

The key to cell therapy in the treatment of stroke is the mechanism of action - or mechanisms, to be more specific. Cell therapy offers multiple potential mechanisms of action versus the standard small molecule going after one target / one pathway. Cell therapy, whether it be autologous or allogenic, expanded or selected, specific or varied, as the potential to go after multiple targets / multiple pathways to treat the event. This is why we are optimistic on cell therapy in stroke; unlike cancer therapeutics that seem to be getting more targeted and more specific in mechanism, therapeutic agents for stroke may need to go the other direction, more broad and less specific. Stroke may be the one event where a shotgun approach brings about more advancement in standard of care than a sniper rifle.

The Athersys Solution

Athersys is developing an allogenic stem cell product "Multistem" for the treatment of the acute stage of stroke. Multistem cells are multi-potent progenitor cells that are expanded from bone marrow samples taken from healthy volunteers. They are administered by intravenous injection, taking advantage of the well-established tendency of stem cells to home to areas of ischemia or tissue damage. MultiStem is stable to refrigerated storage, and as an "off the shelf" product has the advantage of being available for immediate use in stroke patients rather than requiring the more expensive and time-consuming process of processing cells from the patient's own bone marrow. MultiStem avoids one of the major issues that has stymied the development of many small molecule stroke treatments, in that animal studies have shown that it can be effective when dosed as late as 14 days after stroke.

Multistem has demonstrated potent activity in animal models of ischemic stroke. Rats subjected to cerebral artery ligation to produce a human stroke model were divided into 5 treatment groups and, 7 days after ligation, treated with 400,000 rat allogenic MultiStem (with or without cyclosporine), 400,000 human MultiStem (with or without cyclosporine), or 400,000 irradiated non-viable human MultiStem.

Improved outcomes in assays of neurological functioning, motor skills, balance, and muscle strength were observed for all active treatment groups relative to the post-stroke, pre-treatment baseline, and relative to the control arm. These improvements were consistently seen on Days 14, 28, 42, and 56, even though the majority of the implanted cells were cleared within 48 hours.

These data suggest that the mechanism of action of MultiStem involves supporting the regeneration of native tissue rather than engraftment of the injected cells. The observation of similar results with and without co-administration of the immunosuppressant cyclosporine suggests that immunosuppression should not be required in the clinic. Therapy was effective when administered as late as 7 days post ligation.

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Microscopic studies directly demonstrated that MultiStem treated rats had more viable neurons in the penumbra region that control rats.

MultiStem is hypothesized to exert its effects by migrating to the site of ischemic damage and releasing multiple proangiogenic, cytoprotective, and immunomodulatory factors into the local environment. In a mouse model of critical limb ischemia, imaging studies showed that MultiStem treatment led to an increase in microvascular blood flow that persisted long after most of the injected cells had been cleared. In vitro, MultiStem has been shown to release both vascular endothelial growth factor (VEGF) and brain derived neurotrophic factor (BDNF), each of which has demonstrated neuroprotective properties in preclinical studies. In another study performed in collaboration with Pfizer (PFE) scientists, MultiStem was shown to modulate a wide range of immune system activities in a mouse model of pancreatic islet cell transplant, including the suppression of T cell proliferation and cytokine production; the increased production of anti-inflammatory factors such as IL-10; and increasing the proliferation of regulatory T-cells. All of these activities are potentially relevant to the suppression of unproductive inflammatory responses after stroke.

MultiStem is currently being examined in a 140 subject, double blind, placebo controlled trial for ischemic stroke (ClinicalTrials.gov # NCT01436487). MultiStem will be administered within 1 to 2 days following stroke via intravenous injection. The study will compare the efficacy of two MultiStem doses to placebo, with a functional improvement at 3 months as the primary efficacy endpoint. The study will also examine neurological outcomes using MRI and other imaging methods. Top-line results are expected in the fourth quarter of 2013.

The Cytomedix Solution

Cytomedix is developing ALDH-Br cells for the treatment of stroke and other ischemic disorders. ALDH-Br cells are autologous bone marrow derived cells that have been sorted from the patient's own bone marrow by FACS. The technology takes advantage of the observation that the ALDH enzyme is found in all stem cells, whereas the cell surface markers traditionally used to isolate stem cells, such as CD35, are only found in specific subsets.

By sorting bone marrow cells based on their ALDH status rather than based on a cell surface marker, Cytomedix generates a mixture of adult stem cells capable of providing a variety of supportive functions that the company believes will demonstrate superior properties to those of more narrowly selected cell types. These cells are directed directly into the patient without any expansion, thus minimizing the lag time between bone marrow collection and the availability of therapeutic product. In contrast to MultiStem, which is intended for use during the subacute period beginning 1-2 days post-stroke, the Cytomedix product is administered two weeks post-stroke with the goal of supporting neuronal viability and neurogenesis in the post-acute period.

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ALDH-Br cells have demonstrated impressive activity in an animal model of stroke. Mice treated with ALDH-Br cells two weeks after an induced stroke showed statistically significant improvement in motor function of 41% after 2 weeks, compared to 11% in a control group. Significant effects were also seen in reducing brain volume loss. In a second study, the brains of mice treated with ALDH-Br cells two weeks after an induced stroke exhibited superior blood flow four weeks after treatment relative to control mice.

ALDH-Br cells exert their cytoprotective activity via a combination of promoting improved blood flow, and by directly inhibiting necrosis and apoptosis (Liisa Smith et al, ASH Annual Meeting Abstracts, 2009, 114: Abstract 3056). In vitro, ALDH-Br cells migrate toward cells that have been exposed to hypoxia, and attach themselves to hypoxia and nutritionally stressed cells with greater avidity than to non-stressed cells.

Gene array and protein expression studies have shown that ALDH-Br cells express high levels of several angiogenic growth factors, cytokines, and signaling molecules involved in matrix remodeling. These include angiopoietin 2, VEGF, and MMP2.

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In related applications, the safety and efficacy of ALDH-Br cells in heart failure and limb ischemia have been examined in Phase I trials. These trials were not powered to demonstrate efficacy, but treatment was safe and trends toward improved blood flow and function were observed. In the critical limb ischemia trial, four of 11 patients achieved improved function such as to no longer meet the diagnostic criteria for critical limb ischemia, and the one year rate of limb amputation was dramatically reduced relative to historical standards. In the heart failure trial, treated patients experienced an improvement in maximum oxygen consumption relative to the placebo group. These results support the safety of ALDH-Br cells and provide support for their ability to improve outcomes in ischemic disease.Cytomedix is currently conducting a Phase II trial of ALD-401 in ischemic stroke. The Phase II RECOVER trial (ClinicalTrials.gov # NCT01273337) is enrolling 100 patients with first time ischemic stroke and persistent neurological deficits. Patients in the active arm (n=60) will be treated with a single intracartoid infusion of ALDH-Br cells and compared to a sham treated group (n=40) with a primary efficacy endpoint of recovery of mental and physical function at 3 months, with durability and safety endpoints at 3, 6, 9, and 12 months. Enrollment in the trial has been proceeding slowly. As of May 10, 2013, only 30 patients have been enrolled. In May 2012, Cytomedix announced that an independent data safety monitoring board (DSMB), after reviewing the safety data from the first 10 patients, had recommended that the phase 2 trial continue as designed. That means only 10 patients have been enrolled over the past year. However, we note that enrollment of the first 10 patients took place at three clinical sites in the U.S. Safety data presented in October 2012 at the World Stoke Congress in Brazil showed procedure was safe and yielded no serious adverse events. Enrollment has now been opened to a total of 10 sites, with another 5 expected to come online in the next few weeks. Besides this, there are reasons to believe enrollment will accelerate in the coming months. For the previous 15 months, it seems that the entry criteria for enrollment had been too strict, and that two key issues where holding patients back. The first was age of enrollment. The trial previously capped the age of subjects at 75 years. The new protocol now allows for enrollment of patients up to 83 years of age. Management believes this change will help increase the pace of enrollment by 20%. The second change is the allowance of patients with subcortical stroke. The previous entry criteria only allowed cortical stroke patients, a far more restrictive hurdle. The new protocol now allows both cortical and subcortical stroke patients to be enrolled. Management believes this change should speed enrollment by 50%.

A combination of easing the entry criteria and adding six new sites should help quicken the pace of enrollment throughout 2013. However, Cytomedix tells us the biggest hurdle to enrollment of patients is the bone marrow aspiration procedure required to extract the cells. Surprisingly, it is not the angiography and intracartoid infusion. Both of these are common practice in stroke patients regardless.

To generate the 3 mL of ALDH-Br cells for ALD-401 to be infused back into the patient two days later, a total of 150 mL of bone marrow must be extracted. Although this is not an enormous amount - note that bone marrow transplant procedures require 500 to 700 mL - it is still more than most hematologists or neurosurgeons are accustomed to. Traditional bone marrow aspiration procedures may be only as much as 50 mL. A goal for Cytomedix is to work to increase yield and cell selection on the ALDH-Br cells so that the volume of bone marrow required to generate 3 mL of ALD-301 can be reduced. We know the company is working on this, although we do not expect the procedure to change during this clinical trial. Besides the procedure and volume of bone marrow required, scheduling and the ability to return two days later for infusion are key limiting factors to enrollment. We note these are somewhat limiting factors for Athersys as well.

Nevertheless, management at Cytomedix believes they can complete enrollment at 100 patients before the end of the year. Data should follow four months later, perhaps in April 2014. We remain skeptical of that timeframe, but note that more important than the month of the data is the actual data itself.

Conclusion

The perception by investors with respect to these two programs is one of competition - which company will succeed and which technology is superior? However, we see no reason to believe that the success of one company will mean the success or failure of another. We view these trials are mutually exclusive events. In fact, we see no reason why one patient cannot receive both MultiStem and ALD-401.

- Athersys is dosing patients 1-2 days post moderate-to-severe stroke (ages 18-79) with an IV injection of over 1 billion cells.

- Cytomedix is dosing (note the bone marrow harvest takes place 2 days prior to dosing) patients 13-19 days post stroke (ages 30-83) with persistent neurological deficit 7 days after stroke with an intracartoid infusion of roughly 5 million cells.

Multiple seems to offer advantage in entry and enrollment criteria, potential cost of therapy, and scalability of the commercial product. A popular misconception is that Athersys' MultiStem offers advantages in dosing number of cells and delivery. We strongly disagree. Dosing 1 billion cells isn't necessarily better than dosing 5 million cells - it's not how many cells, it's what the cells do once they are dosed. It is clear that an IV injection is far less invasive than an intracartoid infusion, but for neurosurgeons and stroke patients, angiography and intracartoid infusions are not outlandish procedures. In fact, they are quiet common.

Comparing the protocols of these two trials on ClinicalTrials.gov (ATHX & CMXI), investors can see the enrollment and entry criteria for Athersys is far less restrictive than for Cytomedix. Cytomedix must enroll patients that have the ability to withstand a bone marrow aspiration procedure and catheterization for localizing arteriograms for intracarotid/MCA delivery of the cells. Patients must remain overnight for observation. Patients cannot have >50% stenosis or ulcerated plaque in the cortid artery, or recent cardiovascular events or renal insufficiency. Things like hemoglobin and platelet counts must all be within normal ranges. All concomitant medications must be stopped, such as warfarin, heparin, immuno-suppressants, and anti-angiogenic drugs. We simply do not see this level of restriction on the Athersys program. This clearly explains the hurdle that Cytomedix has yet to overcome with respect to enrollment.

However, despite the challenges that Cytomedix faces with patient recruitment, delivery, and scale, we favor the mechanism of action for ALD-401 over MultiStem. MultiStem is designed to work on the basis of the cells migrating to the site of ischemic damage and releasing multiple proangiogenic, cytoprotective, and immunomodulatory factors. The cells could lead to increases in VEGF, BDNF, or other neuroprotective agents. The key question for Athersys is: Do the cells get to where they need to be and elicit the type of response seen in preclinical and in vitro studies?

We are not convinced that systemic delivery of any therapeutic agent make sense for a localized and acute event inside the brain. In a paper by Detante et al (2009) entitled, "Intravenous Administration of 99mTc-HMPAO-Labeled Human Mesenchymal Stem Cells After Stroke: In Vivo Imaging and Biodistribution," the authors found that IV-injected hMSC are eliminated in urine (~61%), or transiently trapped in lungs (~26%), kidneys (~7%), and liver (~3%) at 2 hours. Only 0.05% of the total IV injected cells were found in the brain (left + right) 2 hours later. The percent drops to 0.03% at 20 hours.

However, the authors did find that more cells are found in the brain of rats with middle cerebral artery occlusion (MCAo) than in control rats at 20 hours. This suggest a mechanism for which hMSC migrate to the site of an ischemic injury in the brain. The literature supports dosing something like MultiStem intravenously, but it is clear that the large majority of cells (>99%) do not end up in the brain. It is a misconception that more cells are better. The preclinical data for both Athersys and Cytomedix are equallty impressive, and Cytomedix dosed on average 1/100th of total number of cells. That being said, systemic IV administration appears to be safer and easier than local brain grafting or intracartoid infusion.

For Cytomedix, the mechanism of action is one of promoting cytoprotective activity via a combination of promoting angiogenesis, inhibiting necrosis and apoptosis, and expressing high levels of growth factors, cytokines, and signaling molecules involved in matrix remodeling. The intracarotid/MCA delivery, although a complex surgical procedure, guarantees the cells end up where they are needed to perform the function they are hypothesized to perform. The key question for Cytomedix is: Can they convince enough patients to enroll in the trial to generate the data?

Both companies have impressive and exciting preclinical animal data. Both companies have opportunities outside of stroke. Athersys is also studying MultiStem in graft vs. host disease, inflammatory bowel disease, and cardiovascular indications. The Athersys pipeline clearly expands beyond stroke. Besides stroke, the Cytomedix pipeline includes programs for critical limb ischemia and heart failure. Plus, Cytomedix has two FDA approved medical devices in Angel and AutoloGel. The company should record $10 to $11 million in revenues in 2013 based on these two products (based on Q1 reported financials).

We will be watching the outcomes of both these trials closely. Data should come first from Athersys, followed by Cytomedix six months later (highly dependent on enrollment rates in 2013). Athersys has a market capitalization of $111 million, whereas Cytomedix has a market capitalization of only $49 million (both based on basic share count). Both stocks have tremendous upside if their respective trials succeed.

Co-Authored by John Tucker, PhD

Source: Does Cell Therapy Hold The Key To Treating Stroke?

Additional disclosure: PropThink is a team of editors, analysts, and writers. This article was written by Jason Napodano, CFA. We did not receive compensation for this article, and we have no business relationship with any company whose stock is mentioned in this article. Use of PropThink’s research is at your own risk. You should do your own research and due diligence before making any investment decision with respect to securities covered herein. You should assume that as of the publication date of any report or letter, PropThink, LLC and persons or entities with whom it has relationships (collectively referred to as "PropThink") has a position in all stocks (and/or options of the stock) covered herein that is consistent with the position set forth in our research report. Following publication of any report or letter, PropThink intends to continue transacting in the securities covered herein, and we may be long, short, or neutral at any time hereafter regardless of our initial recommendation. To the best of our knowledge and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable, and not from company insiders or persons who have a relationship with company insiders. Our full disclaimer is available at www.propthink.com/disclaimer.