Caladrius Snatches Itself A Clinical Candidate For Heart Disease

Summary

• Caladrius Biosciences adds late-stage cell therapy treatment for heart disease to its pipeline.
• The CD34+ cell therapy treatment was licensed from Shire.
• The purchase of the CD34+ program was based on positive data stemming from multiple clinical trials proving that the drug works in the intended population.
• Caladrius states it has enough cash past 2018, but a cash raise will likely be needed before the end of 2018.
• It is highly likely that the company may have to run its own phase 3 study to confirm clinical findings before it can file for regulatory approval for the newly acquired CD34+ cell therapy.

Shares of Caladrius Biosciences (CLBS) closed higher by 9% on Tuesday, after it announced that it had acquired rights to a heart disease drug. This adds a late-stage drug to the pipeline which is why I believe that Caldrius is an excellent buy.

Licensing Deal

Caladrius Biosciences acquired the rights to license the drug from Shire (SHPG) under a licensing deal. According to the deal Caladrius will have to pay an upfront payment which has not yet been disclosed. In addition, Shire will be eligible to receive milestone payments and royalties based on net sales of the product should it reach the market. More specifically, Caladrius has been able to get its hand on an asset that has already completed multiple placebo controlled studies. This involves the CD34+ cell therapy program for the treatment of refractory angina. The data set that has been obtained by Caladrius for this purchase is pre-clinical, phase 1, phase 2, and phase 3 clinical study data. In my opinion, this was a smart buy for Caladrius. That's because it now has its hands on a late-stage asset. Sure, it had to give up some cash for it and give up royalty payments for it. That doesn't change the fact that this adds a late-stage asset to its pipeline.

Purchase Based On Data

It is sometimes seen that pharmaceutical companies acquire earlier stage assets just based on pre-clinical data, and hope that a drug will succeed. This is a good opportunity for Caladrius. That's because it acquired the drug based on multiple positive studies done in over 300 patients. The data from all three studies are quite good. Results were good for two reasons. The first being that they were published in the European Heart Journal under the title "Autologous CD34+ cell therapy improves exercise capacity, angina frequency and reduces mortality in no-option refractory angina: a patient-level pooled analysis of randomized double-blinded trials". All the results for this publication can be seen here. In essence, it was observed that patients treated with CD34+ cell therapy saw statistically significant improvement in several measures including: Mortality, exercise capacity, and chest pain frequency.

Financials

According to the 10-Q SEC filing, Caladrius Biosciences has cash and cash equivalents of $64.5 million as of September 30, 2017. It expects that its cash will be enough to fund operations well past 2018. That means I don't see any dilution in the near-term, but likely the company will have to raise cash toward the end of 2018. That's because biotech companies never wait until the end to raise cash. If it wants to maintain its operations it will have to obtain cash many months before it runs out .

Conclusion

Caladrius adding a late-stage product to its pipeline is a good thing. That's because it now has a product that has already been shown to work in multiple clinical trials. In addition, the acquisition credits the company's work on CD34+ cell therapy treatments. There is still some risk involved. That's because it will likely have to run its own late-stage study to show that CD34+ cell therapy proves efficacy for the targeted population. That will need to be done before it can file for FDA approval. There is no guarantee that the phase 3 results will come out positive. However, Caladrius has seen some good data for this CD34+ cell therapy treatment for heart disease. Therefore, I'm inclined to believe that any late-stage trial that is done will likely come out positive.

Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Comments

[Bio Surfer]

After reading the article as well as all the comments, my view on this company:

1） if it is a great drug why shire wanted to sell
2) the management team got to change, not good enough
3) mis judgement in history will likely to repeat in the future

so, not very good opportunities here

[jaayg82]

Those who got burned on this one might want to do some research on ATHX. I invested in both at the same time and it seems ATHX management has a bit more of a clue on both the science and the business of bringing a stem cell product to market. There have been some particularly interesting developments on the stock in the past week. I'm down but not out and unlike with CLBS I think there is a reasonable probability of an enormous payday if I stick it out a few more years.

[BRUCE E. W.]

Wait for the dilution. It is a given with their history. I was also with Neostem from the early days, through China, then Japan and a host of University presentations until today. Always the same. They seem to short their own stock with junk public offerings pumped with clinical trial promises to raise capital to complete research just on the brink of break through success. If you wait, they will make a stock offering at a discount rate to raise its finances sooner than later. I suggest you benchmark this at the 52 week low area. That's where it will bounce back from for another ride through the treadmill. It would be nice if they cured peridontal disease with some simple application of stem cell therapy after all this time. But the big lure is hearts and minds; and those stem cells seem to be from cash cow market samplings. Bitter? You bet!

[Kjellin]

From 2010 up until at least 2013-2014, the Catholic Church was involved in Neostem, as well. They may have bailed out at some point between then and now, or between Neostem and Caladrius. I don't know.

I can't determine either way. If you or anyone else can, please let me know.

[jaayg82]

Investing in this stock was one of my biggest failures. I got in back when they were Neostem primarily because I thought they might have a future in manufacturing/processing. They got out of that business. Poor management, bad decisions, extreme dilution of the stock. The only reason I continue to hold is that I've already lost all my money so might as well bank on the million to one chance of a clinical success. Valuable lessons learned on investing in stem cell as the next big thing. The risk of bringing something like this to market without serious dilution are great. I would stay away.

[JJPP]

Ah yes, the good old days when Robin would have her investor calls and promise the world based on the current clinical trials which all failed with the exception of the Type 1 diabetes study currently in ph2. I also invested in Neostem for their CD34+ product to repair heart damage after an MI. Lost most of my investment too.

[NDHT]

Felt like I thought that I had just got a rare disease, thinking why I am the only unlucky one? But when I went to see the doctor, there is a long line of patients waiting there to see him/her. Jokingly kind of felt better to see I am not alone here :-)

To be fair, those dark days were made by the previous management. Hope the new team will make a difference.

[JJPP]

One of my concerns here is that previous CD34+ studies in CV trials all seem to have performed well in early stage however the vast majority, if not all, have failed to make it to the NDA stage. I am not educated enough on CD34+ to start to dissect the clinical differences between the trials, disease states in which they have been studied, and outcome data however it is a point of concern to a potential investor like myself. I believe their own CD34+ and Baxter's 34CD+ trials from a few years ago failed miserably but those studies were not for angina.

[Kjellin]

Long CLBS, fingers crossed for the future.