RegMed Daily Dialogue, 7/28/11, the blame game, who owns it
The 6 W’s: Who, what, where, when, why and what of it
US stock futures posted small gains Thursday, signaling a potential bounce for Wall Street a day after blue chips suffered their worst rout in nearly 2 months, although upside remains limited by the ongoing stalemate over the government’s debt limit. The Dow edge upward at the opening bell to snap a 4 session losing streak …
Without signs of movement toward an agreement between Republicans and Democrats … the old adage resonates … “where there is chaos, there is opportunity” …
A strong report on jobs is sending Wall Street slightly higher on Thursday even as the stalemate continued in Washington over the debt ceiling.
Regenerative medicine/stem cell universe has “down drafted in share pricing … so instead of crying … time … its buying time!” on 7/281/11 … The NASDAQ is UP +29.07 (+1.05%) to 2,793.86. The Dow is also UP +50.29 (+0.41%) to 12,352.84.
Who is UP … Advanced Cell Technology (ACTC.OB), Aastrom (ASTM), Athersys (ATHX), BioMimetic (BMTI), Biotime (AMEX: BTX), Cytori (CYTX), Geron (GERN), ThermoGenesis (KOOL), Osiris (OSIR), Pluristem (PSTI), StemCells (STEMD) and Tengion (TNGN) are up …
What’s new in the regenerative medicine/stem cell market …
Histogenics, Positive P2 Data for NeoCart Autologous Cartilage Tissue Implant for the Treatment of Knee Cartilage: Data at 2 years post-op met primary endpoints. Histogenics Corporation, a privately held regenerative medicine company, presented positive P2 data from a perspective, randomized, controlled study, compared NeoCart to microfracture (MF) for knee cartilage injury treatment at 2 years post-operation. The P2 study of NeoCart evaluated 30 subjects, with a 2:1 randomization ratio of NeoCart treatment to MF treatment. Efficacy outcome measures applied included the Knee Injury and Osteoarthritis Outcome Score (KOOS) and the International Knee Documentation Committee (IKDC) Score. The bottom line, NeoCart is a bio-engineered neo-cartilage implant containing an autologous chondrocyte population matured in a biodegradable collagen matrix. The P2 results showed that ACTI treatment using NeoCart is associated with statistically significant improvements in knee and general health outcomes scores by 6 months, at the primary endpoint of 12 months, and that are then sustained for at least 2 years, and NeoCart had a higher proportion of therapeutic responders in comparison to MF at 1 and 2 years. These P2 results demonstrate advancing this program into a P3 trial under a Special Protocol Assessment (SPA) with the FDA to addressing a significant opportunity – pain associated with cartilage injury – in the large and fast-growing global sports medicine market. Cartilage has a poor ability to repair itself, and, as a result, these injuries can persist indefinitely and often lead to pain and compromised joint function. According to results from the study, there were no serious adverse events related to treatment with NeoCart. Both cohorts demonstrated improvements in a measure of general health status at 6, 12 and 24 months. NeoCart-treated patients demonstrated significant improvement for all outcome measures included in the study at 12 and 24 months, including knee function, pain (including maximum pain), activities of daily living, and sport and knee quality of life. The study also confirmed a favorable safety profile for NeoCart.
Updating, the ASTM story: isn’t this a story about the shareholder dilemma? When and how to invest? Now the big spending starts on top of the current burn rate. The SPA approval dropped the stock on Tuesday (7/26/11). Shareholders have been waiting since last October ’10 for this approval. A day which should have been joyous and appreciative; instead a debacle! The stock traded down ($0.30) with volume of 1,376,206 on 7/26/11; very much higher than the 10-day average of 354,244. The much anticipated approval has cast a plight over the shares as their burn rate and clinical initiatives must be supplemented by their in-place ATM financing program or could be over-shown by yet another private placement or unit offering. Wednesday’s further (7/27/11) price drop ($0.07 or 2.60%) to $2.62 with resulting volume of 610,726 shares confirms that more communication and transparency is needed. Also, be ready for the next hurdles; patient recruitments and site initiation for the no-option trial! The bottom line, I would sell ASTM into any strength: (1) sample size has increased from “around 500” to now 594!!! Almost 20% more!!!! I believe this means management didn’t understand what they were up against at FDA! Not understanding FDA does not bode well for the second “poor option” CLI trial using their proposed new endpoint (not AFS); (2) they have an ATM (financing structure) but, now that ASTM has “firmer” knowledge of the regulatory path; could a “real” financing be in the works that would be immediate (rather than gradual, with the ATM) dilution, (3) trial will take 18 months to enroll at least and then 12 months of study; (4) then 6 months to analyze the data when un-blinded, which means 3 years of waiting for results on CLI. Are investors willing to watch paint dry? And, finally (5) ASTM will still need a second trial for approval, unless the results of this first trial are out-of-the-park spectacular. ASTM’s management and BOD have removed themselves from the premise that they are custodians and responsible for shareholder’s investment! Raising money from the venture community is a lot different than seeking a third (3rd) funding post a re-capitalization (reverse) and 2 offerings from the public markets in a one (1) year period!
