In November of 2008, Genzyme Corp. and Osiris Therapeutics (one of our Sector Companies) announced a "strategic alliance for the development and commercialization of Prochymal and Chondrogen." Prochymal and Chondrogen are both biologic drug candidates. Prochymal is a preparation of mesenchymal stem cells (MSCs) formulated for intravenous infusion. Chondrogen is a preparation of MSCs formulated for direct injection into the knee. The mesenchymal stem cells n these products are taken from the bone marrow of healthy young adult donors. Both product candidates are allogeneic and scalable, two important qualities from Big Pharma's perspective.
Osiris's deal with Genzyme made it the Sector Company with the highest market capitalization at December 31, 2008, a distinction that returned to Geron Corp. after Osiris suffered clinical trial setbacks in 2009. Following Genzyme and Osiris came a deal for an autologous biologic drug product between Opexa Therapeutics (a Sector Company) and Novartis.
The latest deal is Phizer's purchase of Athersys, Inc.'s stem cell research. Athersys, one of our Sector companies, has 18.9 million shares outstanding with a float of 14.5 million shares. Athersys' deal with Phizer was announced on the 21st of December. During that week, roughly 110 million shares changed hands, and that includes a short trading day on the 24th and no trading on the 25th. So basically 110 million shares traded hands in three and one half trading days. It seems a substantial amount of money is on the sidelines waiting for anything positive on the stem cell front.
What about the price and resulting market capitalization of Athersys you ask? Athersys closed on Friday, December 18th at $1.03 per share giving it a market cap of $19.5 million. The closing price on Christmas eve was $5.52, providing a market cap of $104.5 million, a five fold increase in four days. This is based on a purchase of Athersys' mesenchymal stem cell potion for inflamatory bowel desease. At December 31st, Athersys' market capitalization had fallen to $78.1 million, still roughly four times what it was before the Phizer deal was announced.
What do these three stem cell Sector Companies have in common that attracted Big Phara?
Two of the three companies have sold or partnered with major pharmaceuticals based on allogeneic, scalable, stem cell therapies. The third, Opexa Therapeutics, which is doing research on autologous mesenchymal stem cell therapies, sold the research it has done on autologous myelin reactive T-cells or MRTCs. Athersys and Osiris sold products, or an interest in products, focused on mesenchymal stem cells extracted from bone marrow. Cells that are combined with undisclosed growth factors and other biologics and given a name. Athersys' product is called MultiStem and is described as follows:
MultiStem is a biologic product that is manufactured from human stem cells obtained from adult bone marrow or other nonembryonic tissue sources. Unlike other cell types, after isolation from a qualified donor MultiStem may be expanded on a large scale for future clinical use and stored in frozen form until needed.
MultiStem consists of a special class of human stem cells that have the ability to express a range of therapeutically relevant proteins and other factors, as well as form multiple cell types. Factors expressed by MultiStem have the potential to deliver a therapeutic benefit in several ways, such as the reduction of inflammation, protection of damaged or injured tissue, and the formation of new blood vessels in regions of ischemic injury.
2010 will be a fascinating year as we watch stem cell therapies of certain types become a real alternative therapy. Mostly this will happen in Asian or European countries due to the time and cost of FDA approval in the U.S. So far big pharma has not gambled with the rent money where stem cells are concerned. We'll have to wait in order to see what the new year brings.
Good post.
A couple observations:
1. In addition to the companies you mentioned,Roche also made a big 'investment' in MSCs in 2009 - not in terms of any deals but in terms of internal resrouces. Although it wasn't a financial "buy", Roche came out publicly in 2009 with the statement that they had bought the notion that the therapeutic use of mesenchymal stem cells was a game-changer that they were going to build a franchise a nd already building internal expertise. See http://www.biobusiness.tv/videos/195.
2. The Novartis deal with Opexa was not for their T-cell work/product. Rather it was work that they had done that showed the ability to generate monocyte derived islet cells from peripheral blood mononuclear cells as a potential therapeutic paradigm for the treatment of type-1 diabetes. See
http://www.businesswire.com/portal/site/opexa/?ndmViewId=news_view&newsId=20090807005118&newsLang=en
--Lee
Posted by: Lee Buckler | January 08, 2010 at 12:12 PM