The biggest changes in medicine are not coming from technology directly but rather from how diseases are treated using technology. One small cap biotech is leading the way in the area of stem cells research and is poised to go higher now that it has entered a licensing agreement with a Japanese company.
Last week Athersys (ATHX, $1.28) completed a deal that would allow Healios to develop a treatment for ischemic stroke in Japan with Athersys’ MultiStem product. The best news is that ATHX could receive cash payments from licensing fees, milestones, and sales in excess of $200 million from Healios. Two hundred million dollars is a day’s pay for larger biotech firms but for tiny firms like ATHX whose market cap is just over $100 million it is a game changer.
ATHX and other stem cell biotech companies are changing the way disease is treated. For example, in the past slash and burn was the only way to treat cancer. Either cut out the cancerous tissue with surgery or burn it with radiation and chemotherapy. Then drugs were developed to treat the symptoms of disease. A patient may still have the disease but no longer shows the symptoms which is fine but the patient must keep taking the drug forever. Stem cell treatment change all this by regenerating diseased and damaged tissue so that the patient no longer has the disease and is at least as healthy as before.
ATHX is developing its MultiStem product to treat a variety of ailments from traumatic brain injury to inflammatory bowel disease. This serves many functions. It will not be a one-hit wonder that lives and dies on its ability to treat one disease and its product can serve multiple markets. ATHX has a half dozen Phase I and II trials in process or ready to go which means plenty of good news down the road. Biotech companies can produce a lot of good news from Phase I and II trials because the bar for success is considerably lower than Phase III trials.
As a sector, stem cell biotech companies benefit greatly from mostly positive new. The fantastic results of a study or stem cell research generate enthusiasm for all stem cell companies and the positive Phase II and III news at one company spill over to the others. ATHX suffered a 50% drop last April when one of their tests showed that a placebo was just as effective as their treatment, ouch. But they have had nine months to sift through the data and figure out what to do next. More importantly, Healios believes in ATHX so much it is willing to give them cash and lots of it to develop the treatment in Japan.
Last week Athersys (ATHX, $1.28) completed a deal that would allow Healios to develop a treatment for ischemic stroke in Japan with Athersys’ MultiStem product. The best news is that ATHX could receive cash payments from licensing fees, milestones, and sales in excess of $200 million from Healios. Two hundred million dollars is a day’s pay for larger biotech firms but for tiny firms like ATHX whose market cap is just over $100 million it is a game changer.
ATHX and other stem cell biotech companies are changing the way disease is treated. For example, in the past slash and burn was the only way to treat cancer. Either cut out the cancerous tissue with surgery or burn it with radiation and chemotherapy. Then drugs were developed to treat the symptoms of disease. A patient may still have the disease but no longer shows the symptoms which is fine but the patient must keep taking the drug forever. Stem cell treatment change all this by regenerating diseased and damaged tissue so that the patient no longer has the disease and is at least as healthy as before.
ATHX is developing its MultiStem product to treat a variety of ailments from traumatic brain injury to inflammatory bowel disease. This serves many functions. It will not be a one-hit wonder that lives and dies on its ability to treat one disease and its product can serve multiple markets. ATHX has a half dozen Phase I and II trials in process or ready to go which means plenty of good news down the road. Biotech companies can produce a lot of good news from Phase I and II trials because the bar for success is considerably lower than Phase III trials.
As a sector, stem cell biotech companies benefit greatly from mostly positive new. The fantastic results of a study or stem cell research generate enthusiasm for all stem cell companies and the positive Phase II and III news at one company spill over to the others. ATHX suffered a 50% drop last April when one of their tests showed that a placebo was just as effective as their treatment, ouch. But they have had nine months to sift through the data and figure out what to do next. More importantly, Healios believes in ATHX so much it is willing to give them cash and lots of it to develop the treatment in Japan.