Aastrom Biosciences (ASTM), Competition increases Scrutiny
ASTM drops as the short ratio increases to 14.40% from 3.33M, the previous month to 4.06M shares and more …
The flurry of hedge funds selling (in recent filings) from RA Capital of 1,644,838 shares, State Street Advisors of 4,400, Deutsche Bank Securities of 1,100, Credit Suisse Asset Management of 14,925 shares, Wells Fargo of 2,949 shares, UBS Investment Bank of 1,231 shares and BlackRock of 7,528 shares does not bode well.
Sticking to the FACTS, there exists confusing signals: does ASTM need to raise funds with the recent filing of needing to increase the amount of authorized shares at a special board meeting scheduled in March or can they secure a partner to get its product into phase III. ASTM’s clinical trial SPA is still held up with the FDA concerning end-points! But, with so many question remaining against the regulatory constructs of this autologous stem cell therapy, can ASTM go it alone in phase III. Also, does ASTM truly anticipate an idea to run 2 pivotal trials? Maybe, I heard wrong?
- I do NOT think that the differences totally revolve around the … Autologous versus Allogeneic Stem Cell Therapies. Each have their issues.
ASTM has been around since 1989 while PSTI, the up-start only initiated business in 2003. PSTI recently raise $44.5M (2/2/11) in a public offering post smaller offerings while ASTM initiated an 8 to 1 reverse (02/18/10), an offering of $12.4M (1/21/10) followed by another unit offering of $22.5M (12/16/10) and now seeks approval of a new proxy to increase number of authorized shares from 62,5M shares to 150M shares and to increase the incentive plan by 3.9M shares from 3.25M shares to 7.15M shares.
- Never, forget the problems Dendreon (DNDN) faced in their long history with their therapy, Provenge.
ASTM has had a year of a reverse, 2 offerings, dilution and higher spending but, now has competition in the CLI space which spurs contrasts to Pluristem Therapeutics (PSTI).
- ASTM and PSTI are both addressing: Critical Limb Ischemia (CLI) is a severe obstruction of the arteries which decreases blood flow to the extremities (feet, legs and hands) and has progressed to the point of severe pain, skin ulcers and sores. Patients suffer from severe pain caused by ischemia, tissue loss, ischemic neuropathy or a combination of these factors. Estimates are greater than 1M CLI patients in the US with an incidence that is growing with an aging population. Up to 40% of the CLI patients are categorized as “no-option;” they are ineligible for further revascularization and 30-40% will require a major amputation within 12 months. The 4 year mortality, post-amputation rate is as high as 76% in these patients. CLI is a major unmet need.
The Bottom Line: Differences in these companies are playing out for both in market capitalization, clinical initiatives and share pricing … strong indicators of sentiment. The clinical initiatives and results will speak for themselves. But, platform differentiation creates controversy. Honest and objective “opinions” focus appreciation or depreciation; however, these trials are advancing with OPM – other people’s money. The future potential of achieving greater clinical milestones and partnering must be the conditions of continued investment. ASTM has trade down since 1/13/11 from $3.13, and is currently trading at 2.36 while PSTI is also trading down at $2.71 from their recent unit offering at $3.25 on 2/1/11. History, share pricing and achievement are great analytics!
Disclosure: I have no share position in ASTM.
