conference call transcripts

Did anyone get a chance to listen to the q3 cc?

I didn't Hop, but I did read through the 8-K for the highlights. Looks like nothing new was announced... they pretty much just confirmed what's been said previously. It does seem they're indicating that the Heart Attack trial could be started back up much quicker than I had anticipated. As Jck stated earlier, it's obvious they seem very confident about their abilities to get therapies approved in Japan. I'm feeling comfortable with a sizable position here. Bolding below is mine.



CLEVELAND, November 10, 2014 – Athersys, Inc. (NASDAQ: ATHX) today announced its financial results for the three months ended September 30, 2014. Highlights of the third quarter of 2014 and recent events include:

• Enrollment nearly complete in Phase 2 clinical trial of MultiStem ® cell therapy for treatment of ischemic stroke;

• Confirmation by the Japanese Pharmaceutical and Medical Devices Agency (PMDA) that MultiStem product manufacturing is suitable for clinical development – an important regulatory milestone;

• Preparations for Phase 2 acute myocardial infarction (AMI) study nearing completion, with several clinical sites progressing toward site initiation

• Multiple grants awarded in the United States and Europe directed at process development and non-clinical and clinical development in central nervous system and pulmonary areas;

• Third quarter 2014 revenues of $0.3 million and net loss of $4.7 million, which includes non-cash income of $2.5 million related to the change in fair value of warrant liabilities and non-cash expense of $0.7 million in stock-based compensation for quarter ended September 30, 2014; and

• Ended the quarter with $32.4 million in cash and cash equivalents.

“We have focused in the past several months on completing enrollment of our ongoing Phase 2 study of MultiStem cell therapy as a treatment for ischemic stroke,” said Gil Van Bokkelen, Chairman and Chief Executive Officer of Athersys. “Enrollment is nearly completed and we anticipate having data from the trial around the end of the first quarter of 2015, several weeks after our last patient completes the ninety-day follow-up visit. We believe that MultiStem therapy has the potential to greatly improve outcomes for stroke patients and represents a substantial market opportunity given the limited treatment options available today, and we eagerly await the results of this study.

“In Japan, we continue to build relationships with the PMDA and potential Japanese collaborators to better position Athersys in this important market,” added Dr. Van Bokkelen. “We are pleased that the PMDA recently confirmed that our manufacturing is suitable for Japanese clinical development, which represents an important regulatory milestone that helps facilitate our development efforts there. Importantly, the new regulations regarding the accelerated regulatory pathway are expected to be implemented in Japan by the end of this year, paving the way for accelerated development and commercialization of regenerative medicines, such as MultiStem therapy.

“We have also made great strides in preparing for our Phase 2 clinical trial of MultiStem to treat acute myocardial infarction,” added Dr. Van Bokkelen. “This study builds on promising Phase 1 clinical and supporting non-clinical data that suggests MultiStem could provide a meaningful benefit to patients that have suffered serious damage from a heart attack. Our first study sites are expected to be ready to go by the end of this year, and we look forward to substantial clinical study activity in 2015.

“Additionally, we are engaged in preparation activities for clinical work in other targeted areas where we believe MultiStem therapy may be well-suited. Finally, we continue to have discussions with potential partners focused on several areas, driven both by the strength of our programs and technology, as well as promising trends in the regulatory area,” concluded Dr. Van Bokkelen.


For the three months ended September 30, 2014, total revenues were $0.3 million compared to $0.6 million in the comparable period in 2013, reflecting primarily a decrease in grant revenue. Grant revenue may fluctuate from period to period due to the timing of grant-related activities and the award and expiration of grants, while contract revenues will be driven by license, royalty and milestone payments from existing and possibly new business collaborations.

Research and development expenses were $5.8 million for the third quarter of 2014 compared to $4.7 million for the third quarter of 2013. The difference reflects increases in preclinical and clinical development costs, personnel costs, research supplies, and stock-based compensation. General and administrative expenses increased to $1.7 million during the third quarter of 2014 compared to $1.5 million in the same period of 2013 due to increases in personnel costs and legal and professional fees.

Net loss for the three months ended September 30, 2014 was $4.7 million compared to a net loss of $5.6 million for the three months ended September 30, 2013. The difference reflects the impact of a $2.5 million increase in non-cash income from the change in the fair value of our warrant liabilities, less the $1.3 million aggregate increase in research and development and general and administrative expenses, and the $0.3 million decrease in revenues.

As of September 30, 2014, we had $32.4 million in cash and cash equivalents, compared to $31.9 million at December 31, 2013. During the nine-month period ended September 30, 2014, cash used in operating activities was $19.7 million and was $18.3 million in the comparable period of 2013.

Thanks for the thoughts/replies guys.

Hi Jck and anyone else here,
What do you make of this bit from the call:

"The study is designed to give us a comprehensive evaluation of this patient population and also help guide us in subsequent clinical development. You might find that MultiStem therapy works better for certain patients than for others or that it has better effects on certain clinical outcomes, information that we would build into future studies. Evidence of meaningful clinical impact would represent success even if we did not necessarily achieve statistical significance on all key endpoints."

Gil made a similar statement right before the UC outcomes came to light, so this doesn't give me confidence about stroke. Ted Tenthoff was on this call too and asked about this but I can't make heads or tails of the reply from Bill Lehmann:

"I think one of the important thing Gil mentioned was the information we developed over the past year really focused on reimbursement and what’s going to be necessary for making the case for strong pricing in Europe and other geographies. And one of the key themes that we’ve heard is that we need to understand the impact of the MultiStem therapy across multiple measures of stroke recovery, such as the NIHSS scale or Barthel Index and the modified Rankin score and we also need to be able to evaluate the improvement across the severity spectrum.

So as you recall one of the key enrollment criteria is a stroke severity of 8 to 20 and we need to be able to evaluate across that whole spectrum improvement. And so what we done as you said secondly is the prioritized the need for developing that information and finalizing our statistical analysis plan and we done that by bringing the global test or the global recovery evaluation forward as an important tool for providing that information. The components include the modified Rankin score. We have the good recovery, so modified Rankin zero to two. So we look at proportion patients that achieved that. Another component would be NIHSS improvement or looking specifically at a 75% improvement for these patients which is something as important with respect to seeing improvement at the upper end of the severity range and we’re going to look at Barthel Index as well, looking the threshold score of 95 at 90 days.

We’re also looking at those as individual components in our secondary endpoints. So we’re getting a very comprehensive look at this patient population and the impact of MultiStem on this patient population. So I think we’re accomplishing what we need to accomplish to set the stage for subsequent development but also importantly for making the case from a reimbursement perspective."

What are your thoughts on this?

Thanks,
Simon

Hi Simon,

My thoughts are that the company is preparing shareholders for the very real possibility that they won't meet the primary endpoint based on the MRS scale.

But, if they show any efficacy at all with the 2 other measures he discussed, it'll still be a homerun (IMO) as any efficacy data will be good enough to secure a partner in Japan and start a stroke trial their - which under the new legislation - will be pivotal in the sense that ATHX expects to be granted conditional approval in Japan if that single trial shows safety and some level of efficacy.

So, grandslam if the Phase 2 US trial meets the primary MRS endpoint.  Homerun if they show efficacy in any of the other 2 scales.  From what I've read in the pre-clinical data, I'm fairly confident they'll show some level of efficacy, while I'm not as confident they'll meet the primary endpoint.

My approach is to ride the run-up in pps that I expect to see from now until early March 2015, and then take some off the table before stroke results are announced.  If stroke results meet the primary endpoint, this will go to $8 to $10 quickly.  If it doesn't meet the primary endpoint, there will likely be an immediate selloff, but I'll be buying on the retrace with the money I took off the table because IMO news will quickly follow of a partnership in Japan based on the efficacy shown in the secondary endpoints.

jck

Good luck Simon.  Below is a post from Cavalier on Yahoo with his take on this topic.  I don't believe ATHX actually changed the primary or secondard endpoints, but his post explains the rational for evaluating the results according to the 3 different efficacy scales.
_________________________

I really liked what I heard on the con call yesterday regarding changing primary and secondary end points for three reasons:
1. It will allow them to demonstrate Comparative effectiveness metrics over competitive products
2. The New structure will allow them to differentiate to payers and clinicians within different regions of the world....including Asia, Europe and NA
3. It increases their chances of success as they will be able to make claims in niche markets in case the boil the ocean data does not come through

In general, although it is rare to change endpoints this far into a trial,l as it usually causes a study design change which is costly and causes delays. However, this is not their situation. They are already collecting enough data for the new endpoints. More importantly, I think this was purely done because they have an opportunity to commercialize in Japan and knew after the analysis that they were not in a position to present the data in a structure that the Japan regulators would approve or payers reimburse. By making the change now, it sets them up to go to market much faster after approval.