What happened

Shares of Athersys (NASDAQ:ATHX) jumped more than 18% today after the company announced that a collaboration partner has enrolled the first patient in a clinical trial in Japan. Healios is evaluating a product derived from MultiStem, the novel stem cell platform developed by Athersys, as a potential treatment for pneumonia-induced acute respiratory distress syndrome (ARDS).

The clinical trial will evaluate the safety and efficacy of the drug candidate in 30 patients total, with the number of ventilator-free days serving as the primary endpoint. It follows positive results from a phase 1/2 trial that were announced earlier this year.

As of 3:22 p.m. EDT, the stock had settled to an 18.2% gain.

A businessman tossing stacks of dollar bills in the air.

Image source: Getty Images.

So what

Athersys reported $24.3 million in revenue in 2018 (and an operating loss of $25 million), which was by far the highest level of revenue achieved in the last five years. Most of it was derived from the collaboration with Healios. The pair are working together to co-develop MultiStem in multiple applications, including ARS and ischemic stroke. The latter indication is being explored in an ongoing phase 3 trial.

While investors are excited with the company's maturing pipeline and committed international partner, they cannot overlook the fact that Athersys has failed to commercialize MultiStem for the last decade. Shares have lost value in the most recent one-year, three-year, and five-year periods.

Now what

At the very least, Athersys is well funded. The company exited February 2019 with $51.5 million in cash and cash equivalents. It can sell up to $100 million in common stock through the first quarter of 2021 to support operations, which is great for keeping the business afloat but not so great for shareholders. Maybe the small-cap stem cell pioneer can finally get a product to the market in the years ahead, but investors should remain grounded about the company's prospects. This remains a risky stock.