What happened

Shares of Athersys (NASDAQ:ATHX) 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.

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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.