A recent Life Sciences Report article/interview included some positive thoughts on STEM. Figured I'd share. FWIW, I'd imagine any positive developments here would propel this much higher as it's been beaten to oblivion recently (currently at a ~$45 million MC).
www.thelifesciencesreport.com/pub/na/16724?utm_source=delivra&utm_medium=email&utm_campaign=TLSR+final+7-29-15TLSR: The Life Sciences Report
CC: Cantor Fitzgerald's Caroline CornerTLSR: You also follow the stem cell therapy space. Can you talk about that?
CC: The two names I've rolled out so far in that space are StemCells Inc. (STEM:NASDAQ) and Organovo Holdings Inc. (ONVO:NYSE.MKT). I have StemCells rated Buy with a $2/share target price, and I have Organovo rated Buy with a $6/share target.
StemCells is using its platform technology to address issues of the central nervous system (CNS). It has trials ongoing in spinal repair and in dry AMD and associated geographic atrophy. Its HuCNS-SC (purified adult human neuronal cells of fetal origin) is in Phase 2 for both of those indications. Right now, the company is enrolling a Phase 2 clinical trial in which its cells will be used to repair injury to the cervical spine. It is enrolling a trial for dry AMD.
TLSR: Caroline, this is a pretty advanced company because it has so many trials going on. With so many things going for it, why don't investors seem to like StemCells? Its shares are down about 70% over the past year.
CC: A lot of things are going for StemCells. Safety data have been demonstrated—in fact, we can now say safety has been established across the board in cell therapy, versus five years ago.
Why don't investors like this one? StemCells has been under pressure because of the results from its Phase 1/2 in dry AMD, which were released on June 26. The company is still analyzing those data, and it is not certain that the rate of progression of geographic atrophy was actually slowing down. Geographic atrophy refers to the deep cells in the retina that are dying. Two independent groups determined the areas of the atrophy, and they came to different conclusions. StemCells is still trying to figure out what's going on there. However, patients in this trial are seeing better—seeing more contrast and reading more lines of letters. The company is moving forward with a Phase 2 geographic atrophy trial with 63 patients.
"If a company gives sellside analysts too many metrics, they're going to require those metrics down the road."
I think the Street is undervaluing the early data StemCells has seen in spine. The first trial, a Phase 1/2, was in thoracic spine. For safety reasons, trials always start in thoracic spine—the middle of the back—rather than in the cervical spine, because the larynx and trachea are right there. If something goes wrong in a thoracic spine study, the patient is not going to choke.
The thoracic injury data reported in mid-May showed that patients actually converted from complete spinal injury to incomplete injury status—from having no sensation or movement below the site of injury to having some sensation. One person could move a toe, which was pretty impressive for a first stab at this clinical route.
But the goal is to show improvement in cervical spine injury, because if you can improve someone's outcome in a neck injury, you could get that patient using his or her arms again. That would yield massive changes in the quality of life, and also massive changes in how much it costs to pay for a patient's medical management. A Phase 2 cervical spine study called PATHWAY is enrolling now. This has been an interesting ride for StemCells, and it has taken some time to get here. I think StemCells' spinal program has a good chance of success. I'm pretty excited about that.
TLSR: The cervical spine injury trial will enroll 52 patients who have C5-C7 injury, and it will have three cohorts. It's single blind—only the outcomes assessor is blinded here. Final data collection will occur around May 2017, less than two years from now. Are we going to get interim data?
CC: Yes, we should get six-month data in the middle of 2016. And yes, interim data can certainly help the case a lot. In fact, interim data have been quite good for a company called InVivo Therapeutics Holdings Corp. (NVIV:NASDAQ) out of Boston. It has a spinal repair program utilizing a device called the Neuro-Spinal Scaffold. The scaffold is bioresorbable and is implanted into the spinal cord injury site. Patients themselves have been vocal on social media about results of their spinal scaffold placements and the resulting spinal repair that has occurred. This has really helped that company's case.
Of the three patients InVivo has enrolled so far, the first and third have had really good outcomes. The second, which was a more complicated case, has also seen improvement. Even though we are dealing with tiny numbers—just three people—the interim data have been good for the stock because there is nothing else out there to improve patient outcomes. InVivo has a very robust pipeline as well, including the possible addition of stem cells to the scaffold.
TLSR: Caroline, it's interesting to note that the scaffold placements in these three patients have occurred without stem cells seeded into the device. The scaffold alone seems to be responsible for the patients' improvement.
CC: Correct. Another thing that's interesting with InVivo is the surgical technique being used. Before the scaffold is inserted, the surgeon opens the wound in the cord and drains out some of the necrotic tissue. That's different from traditional management of spinal injury. Since the beginning of time, surgeons have just left the necrotic material in the cord and caged around it or supported it mechanically, in contrast to surgical repair of every other type of injury, where removal of necrotic material and reducing inflammation and swelling is important. It may be that surgeons have been too scared to manipulate the cord. But I think the surgical technique itself, letting all that necrotic tissue out, putting a nice scaffold in, and allowing the body the opportunity to repair itself, is pretty interesting.
