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Aastrom Biosciences for CLI

|Includes: Vericel Corporation (VCEL)

Good and Bad news for Aastrom Biosciences today.  Shares dropped heavily after Reuters reports that Aastrom's potential stem cell therapy did not meet a secondary endpoint for it's Phase II clinical trial for the treatment of Critical Limb Ischemia which can cause amputation in those who suffer from the disease.  I have seen this a few times lately, where a stock receives generally positive news, only to come crumbling down.  Aastrom simply rose too fast, too soon.

Aastrom Ischemia Therapy Data Disappoint; Shares Tank

*  Says study meets main safety and efficacy goal

*  Did not show significant amputation free survival

*  Shares fall 36 pct

Nov 18 (Reuters) - Aastrom Biosciences Inc (ASTM.O) reported its experimental ischemia treatment met its main goals, but the company's shares, which had soared in anticipation of the data, crashed as the secondary goal of the trial was not met.

The study met the primary goals of safety and efficacy in patients with critical limb ischemia (NYSE:CLI), a cardiovascular condition that often leads to amputation of the limbs.

CLI is a painful condition caused by obstructions in the arteries that decreases blood flow to the limbs with no medical therapy available at present.

Interim data from the second mid-stage trial failed to show statistically significant amputation-free survival in patients, although data published in June from an earlier mid-stage study had shown promising results. [ID:nSGE65A0F9]

McNicoll, Lewis &; Vlak analyst George Zavoico said the discrepancies with the earlier data was due to the size and scope of the trial.

"Its too small a trial, its underpowered and I think people are forgetting that. You have tremendous variations with fewer patients," he said.

The analyst said data on the time to treatment failure events, which include amputation, deepening of wounds and gangrene, was encouraging.

"The phase 2 trial did exactly what it was supposed to do, that is inform on the phase 3 trial plan," analyst Zavoico said.

Last month, the company submitted a special protocol assessment (NYSE:SPA) to U.S. health regulators for a late-stage trial on the drug and said it plans to initiate the study in early 2011

The stem cell research company's tissue repair cell technology (NYSE:TRC) delivers the patient's own bone marrow directly to the damaged tissues.

A special protocol assessment provides the company with a written agreement that the design and analysis of the trial are adequate to support a marketing application submission.

The company's shares, which have more than doubled in value the last one month, closed down 36 percent at $2.71 Thursday on Nasdaq.  They had touched a 52-week high of $4.45 prior to the announcement.

 (Reporting by Krishnakali Sengupta in Bangalore;Editing by Prem Udayabhanu) (krishnakali.sengupta@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800

Reuters Messaging: krishnakali.sengupta.reuters.com@reuters.net))

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Investors buy ASTM on rumor, sell on news that study met main safety and efficacy goal

Shares were halted this afternoon for Aastrom Biosciences, Inc. (Nasdaq:ASTM), the regenerative medicine company engaged in the development of autologous cell products for treatment of severe, chronic cardiovascular diseases as the company announced that an interim analysis of all 86 patients enrolled in the company's Phase 2b RESTORE-CLI clinical trial shows that the study achieved both its primary safety endpoint and primary efficacy endpoint of time to first occurrence of treatment failure.

The findings were statistically significant (p=0.0132) and close analyses showed a clinically meaningful reduction of 56% in treatment failure events. The RESTORE-CLI trial is the largest fully controlled cell-therapy study ever conducted in critical limb ischemia (CLI)- a severe blockage in the arteries of the lower extremities, which markedly reduces blood-flow. It is a serious form of peripheral arterial disease. The most prominent features of critical limb ischemia are severe pain in the legs and feet while a person is not moving, or non-healing sores on the feet or legs. ASTM is the first company to make it this far in clinical trials with such positive results.

Shares had climbed significantly in advance of today's news presentation but most investors chose to take profits off the table upon release of the data when Reuters reported that the study failed to meet a key secondary goal- something which the study was not designed to demonstrate. That data showed a clinically meaningful reduction in event rates (amputation) of 24% but did not show statistical significance. Phase III will be designed to focus on that secondary data, but at least momentarily the article panicked investors and sent shares tumbling. Others swooped in for the suddenly discounted shares and took them back from $2.86 to the $3.85 range. Moments later, shares continued a slow decline as investors began to digest the news and try to decide how to best intrepret the study data over the next few days.

Aastrom Biosciences has become is a strong stem cell play, but fear of dillution has also impacted shares after a mid-November registration with the U.S. Securities and Exchange Commission to sell, from time to time, up to $75 million of Common Stock, Preferred Stock, Debt Securities, Warrants, Units, or any combination thereof. It appears that the fear that the company could sell shares on the good news played a role in the mass exodus.

The company has made great strides in their pipeline and over the next few months are scheduled to share more information with the investment community about their break-through treatment candidates. According to the their latest shareholder presentation, in December they are expecting to announce the complete enrollment in Phase II for their DCM (Dilated Cardiomyopathy catheter trial along with:

Phase 2 Surgical-DCM 6-month results in January,

SPA negotiations for Phase 3 in CLI with FDA between now and early 2011

Phase 2b CLI 12-month results in Q2

Phase 2 Surgical-DCM 12 month results in Q2/Q3

The value of Aastrom’s pipeline will be more clear going forward, as these results and other news start to trickle in. Success in CLI has set ASTM apart from other stem cell companies as other pharmaceutical and biotechnology firms have recently abandoned programs aiming to treat CLI.

In February 2010, Aastrom had reported results from an interim analysis of data from this trial that showed a statistically significant clinical benefit favoring Aastrom's autologous cellular therapy for the first 46 patients enrolled in the trial, in both time to first occurrence of treatment failure (a composite endpoint consisting of major amputation of treated leg, all-cause mortality, doubling of total wound surface area from baseline and de novo gangrene; p=0.005) and amputation-free survival (p=0.038).

Results of the second interim analysis were presented today in a non-CME satellite session of the VEITHsymposium(NYSE:TM) in New York City by principal investigator Richard Powell, M.D., chief of vascular surgery at Dartmouth-Hitchcock Medical Center in Lebanon, NH. An archived webcast of the presentation will be available at aastrom.com/investor.cfm.

"I am very optimistic about the treatment response rates we have seen in patients in this trial so far. These interim data suggest that there is a clear and clinically meaningful therapeutic effect at work in treated patients. I look forward to examining the benefits of this treatment in the context of a larger Phase 3 study," said Dr. Powell.

The two interim analyses were done to provide information to support the design and execution of Aastrom's Phase 3 CLI program. In October, Aastrom announced plans to initiate a Phase 3 CLI clinical development program under special protocol assessments (SPA) with a Fast Track designation by the FDA.

"We believe these interim results provide further evidence supporting the use of our autologous cell therapy to treat patients with this devastating disease," said Tim Mayleben, president and CEO of Aastrom Biosciences. "As expected, these data provide essential guidance as we refine and finalize the sample sizes and patient selection criteria for our Phase 3 program."

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