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Q1/10 Results For Aastrom Biosciences (NASDAQ: ASTM)

Aastrom is developing autologous cell products for the treatment of chronic cardiovascular diseases. ASTM’s proprietary Tissue Repair Cell (NYSE:TRC) technology expands the numbers of stem and early progenitor cells from a small amount of bone marrow collected from the patient. Bone marrow provides a rich source of diverse cell populations is easily accessible and allows Aastrom to produce a personalized treatment for site-specific delivery to the patient’s diseased tissues.

Quarterly Regulatory Update: ASTM is currently conducting a Phase II cardiac regeneration clinical trial (the IMPACT-DCM trial) in patients with dilated cardiomyopathy (DCM – severe chronic heart failure) and a Phase IIb vascular regeneration clinical trial (the RESTORE-CLI trial) in patients with critical limb ischemia (CLI – the most severe form of peripheral arterial disease):

U.S. cardiac regeneration program: U.S. Phase II IMPACT-DCM clinical trial (surgical delivery)

  • To date, this clinical trial has enrolled 29 patients’ at 5 sites across the U.S.  The IMPACT-DCM trial is the 1st trial to evaluate the surgical delivery of Cardiac Repair Cells (CRCs) directly into the human heart muscle for the treatment of congestive heart failure associated with dilated cardiomyopathy (DCM) in both ischemic and non-ischemic patients.

Anticipated U.S. Phase II clinical trial for DCM patients (catheter delivery)

  • Expansion of clinical program to evaluate CRCs in the treatment of severe heart failure patients associated with DCM in both ischemic and non-ischemic patients is underway,
  • Investigational New Drug (NYSE:IND) application has been submitted to the FDA to initiate a 2nd clinical trial to treat DCM patients.  This trial is designed to explore a catheter-based approach for the delivery of CRCs to treat DCM patients, in addition to the ongoing surgical delivery approach in the IMPACT-DCM trial.

U.S. vascular regeneration program: U.S. Phase IIb RESTORE-CLI clinical trial

  • To date, this clinical trial has enrolled 76 patients at 18 sites across the U.S.  The RESTORE-CLI trial is evaluating Vascular Repair Cells (VRCs) in the treatment of patients suffering from the most severe form of peripheral arterial disease (PAD), a condition known as critical limb ischemia (NYSE:CLI),
  • As planned, the first 30 patients in the RESTORE-CLI trial completed their 12-month follow-up visits.

Financial: Updating our 10/29/09 post; ASTM finished the day (11/6/09) trading at $0.31 with a market cap of $52.18 M post the earnings release. NASDAQ has scheduled an oral hearing for 11/12/09 as ASTM intends to request continued listing; the Panel has the authority to grant Aastrom up to an additional 180 days from 10/2/09, or until 3/ 31/10, to implement the plan of compliance.

  • Total revenues for Q1/10 consisted of product sales: $73,000,
  • Total costs and expenses decreased to $3,889,000 for Q1/10,
  • R&D expenses increased to $2,911,000 for Q1/10; this increase reflects continued expansion of clinical development activities including the costs associated with recruitment and treatment of patients in the IMPACT-DCM clinical trial. R&D expenses for Q1/10 also included a non-cash charge of $186 K related to share-based compensation expense (reason for share-based compensation in the R&D budget because it includes people and expenses for clinicals, manufacturing and QA etc),
  • SG&A expenses decreased to $946 K for Q1/10. This decrease is primarily due to an offset to the stock compensation expense for Q1/10 or a reversal of $279 K of previously-recognized expense for certain options held by Mr. Dunbar that will be forfeited when he steps down on 12/14/09. SG&A expenses for Q1/10 included a non-cash charge of $140,000 relating to share-based compensation expense. Interest income was $28,000 for Q1/10,
  • Net loss for Q1/10 the quarter was $3,801,000, or $0.02 per common share,
  • Aastrom had $17.4 M in cash; the burn rate will average approximately $1.4 M for FY10.

Bottom Line: Management changes will occur on 12/14/09 as ASTM continues to make clinical progress as their CRCs and VRCs have provided early benefits to critically ill patients and enrollments into the cardiac and vascular clinical trials remain on track. They also continue to expand clinical programs by the addition of a 2nd cardiac regeneration trial to explore