On November 15, 2007, Athersys announced in a press release that they had received a letter from the FDA giving the green light to start a Phase I safety study of MultiStem, their adult, allogeneic stem cell product. Athersys will start an open label, dose escalation trial to test their cells after bone marrow transplantation.

This is an interesting first clinical trial choise for Athersys to begin testing their cells in. This MultiStem cell product is very similar to Osiris’ cells (some people think they are the same cell, but Verfaillie has done some thorough analysis of the differences). Although there is some scientific differences between MAPCs and MSCs, I don’t believe they would function differently in this clinical indication. Osiris is already in a similar Phase III study for GVHD and would be first to market by several years (assuming Prochymal holds up to Phase III scrutiny). It would be very difficult for Athersys to gain any traction in this market if Osiris reaches BLA first. However, there are some good reasons why Athersys may have chosen this indication to begin human trials. These reasons might include:

1) The FDA is comfortable with MSC-like cells in this indication, so a trial such as this may be a path of least resistance to begin establishing their human safety package.

2) Based on Osiris’ Phase II data for GVHD, it looks like the cells will be safe and potentially efficacious (positive press releases are always good for product-less companies)

3) This trial will be much quicker and have fewer patient safety risks compared to other indications.

4) Being open label and with no ridiculous multi-year endpoints, the data should accumulate quickly if they can accrue patients fast enough

5) The MultiStem cell product is planned to be the sole “drug product” that would address a variety of indications (such as myocardial infarction & stroke). Safety data from this trial will be able to go into a Master File that can support initiation of advanced Phase I/II studies in bigger ticket indications (similar to other stem cell company strategies).

As the business models and regulatory strategies for cell therapy companies are evolving, it is important not to take their initial studies at face value when making an assessment of the markets they are going after. A marketed product in this announced Phase I trial indication isn’t sufficient to obtain a Genzyme-like market cap for Athersys, but this trial is establishing an important foundation for the MultiStem product as it attempts to build an indication base.