Having a big pharma partner validate its technology has caused Athersys to more than quadruple, as I write, over the last two days.
MultiStem is being tested in several conditions, but Pfizer's license is specifically for the treatment of inflammatory bowel disease (IBD), a group of conditions that includes ulcerative colitis and Crohn's disease. The license is only costing Pfizer $6 million up front because the technology is still relatively unproven, having not entered clinical trials for IBD yet. Athersys can get milestones of up to $105 million and royalties as the drug passes through clinical trials and is commercialized.
Pfizer will pay for the phase 1 and 2 trials. Then, if it gets that far, Athersys will have the option of co-developing the drug -- sharing profits and losses -- or letting Pfizer proceed on its own and take the milestones and royalty payments.
Unlike traditional stem cell companies like Geron
Stem cells aren't particularly new to large pharma. GlaxoSmithKline
But Pfizer seems to have taken a particular liking to stem cells, having established a unit to study them last year. If you're going to follow Pfizer's lead and invest in stem cell companies, I'd suggest you also follow its lead and keep your investments in stem cell technology to a very small fraction of your portfolio.