Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Athersys Rose as Much as 15.2% Today

By Maxx Chatsko - Updated May 14, 2019 at 3:55PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The FDA has given the company's lead drug platform a potential leg up in development.

What happened

Shares of Athersys (ATHX -65.54%) jumped more than 15% today after the company announced that its MultiStem product has received Fast Track designation from the U.S. Food and Drug Administration in acute respiratory distress syndrome (ARDS). The designation follows favorable data from a phase 2 trial reported in January.

MultiStem is a stem cell product that extracts cells from a single qualified patient, expands them at large scale, and then creates many doses of unmodified stem cells from that single extraction. Athersys is evaluating MultiStem's potential in ischemic stroke, graft-versus-host disease, acute myocardial infarction, and ARDS, in addition to many preclinical programs.

As of 3:41 p.m. EDT, the stock had settled to a 14.6% gain.

A man holding a cutout of an arrow pointing up.

Image source: Getty Images.

So what

Fast Track designation is awarded to experimental therapies that demonstrate potential in treating diseases with significant unmet medical need. It provides the potential for faster regulatory review, which can help drugs reach market sooner. It doesn't lower the bar for safety or efficacy data.

Athersys is confident it doesn't need help on that front. In the confirmatory part of a phase 2 trial, individuals who received MultiStem within several days of being diagnosed with ARDS and placed on a ventilator experienced lower mortality, more ventilator-free days, and fewer days in intensive care units compared to those given placebo.

The data were compiled from the first 28 days of observation, with 20 patients receiving treatment and 10 patients receiving placebo. The study was not powered for efficacy outcomes. Athersys and the study investigators are now observing patients and collecting data for a one-year follow-up period.

Now what

This is certainly a positive step for the company, but investors should remain cautious considering Athersys hasn't been able to successfully commercialize MultiStem for the last decade. Will this be a turning point? Investors might get an answer within the next year.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Athersys, Inc. Stock Quote
Athersys, Inc.
ATHX
$0.26 (-65.54%) $0.50

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
331%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.