By: Dr. George S. Mack, Principal Analyst at BioDecade
A treatment that could help reverse paralysis would be considered a landmark achievement in medicine, and now it’s on the horizon.
Being paralyzed in an accident has to be the most devastating of situations for patients and their families. Nothing else quite compares. Patients victimized by spinal cord injuries (SCI) go from pre-injury everyday normal function to sudden catastrophic loss of mobility and feeling. If the injury is at the cervical spine level, a patient may not even be able to feed himself. The disruption of motor paralysis is immediate, and it affects everyone in the patient’s sphere of influence on a near 24×7 basis. The emotional and financial burden to the family is crippling, and the economic burden to the health care system is off the charts.
The good news for newly-injured patients is that a phase 1/2a trial to treat subacute cervical SCI is demonstrating that some patients are experiencing partial reversal of motor paralysis in their arms, hands and fingers. The key here is enveloped in two related but vague terms used in the previous sentence—newly-injured and subacute. These will be addressed.
The company we’re talking about is Asterias Biotherapeutics (NYSEMKT:AST). The name of the company is derived from the common starfish, Asterias rubens, which can re-grow lost appendages even after the animal has matured to the adult stage of its lifecycle. The company has three products in its visible pipeline (Figure 1), two of which are already in human clinical development. The company’s lead product candidate is in development for neurological issues, including the aforementioned spinal cord injury. The other two are addressing cancers.
From an investor perspective, the Asterias pipeline portfolio has tremendous potential that could ultimately be expanded broadly into new areas that are not currently in clinical trials. But for now, the immediate growth driver for the stock is the company’s neurology asset, AST-OPC1 (human embryonic stem cell-derived oligodendrocyte progenitor cells [OPC]), formerly known as GRNOPC1.
Figure 1 Asterias Biotherapeutics Pipeline (Source: Asterias Biotherapeutics)
The company’s earliest-stage pipeline product, AST-VAC2 (human embryonic cell-derived immunotherapy) is on its way to human clinical development, but it is still preclinical and is not a current focus of investors. The first patient is expected to be dosed before year end. It’s an allogeneic (same species, but genetically dissimilar) candidate designated as which the company intends to develop initially for non-small cell lung cancer (NSCLC) and is a potential combination therapy with other immune system enhancers such as checkpoint inhibitors. I am not assigning any value to this program for the near term because it is still immature from the development timeline perspective. Think of AST-VAC2 as a call option.
A more advanced candidate in the Asterias pipeline is an autologous (patient is his own donor, i.e. genetically identical) cell therapy product designated as AST-VAC1 (autologous monocyte-derived dendritic cell vaccine), formerly known as GRNVAC1. AST-VAC1 is an exciting immunotherapy that has been in an open-label, multicenter phase 2 study (NCT00510133) for acute myeloid leukemia (AML) patients who are in complete remission. After completing chemotherapy, patients will undergo a specific type of apheresis, called leukapheresis, where white blood cells are extracted from a whole blood sample. In this case, the white cells investigators want are monocyte-derived dendritic cells, which are isolated and then transfected, i.e. new genetic material is transferred into the cell. The messenger RNA (mRNA) transfected into these dendritic cells is encoded to express proteins called human telomerase reverse transcriptase (hTERT) and lysosome-associated membrane protein (LAMP-1). The cryopreserved end product is the vaccine called AST-VAC1 with which AML patients in remission are immunized once each week for six weeks, followed by a four-week break period, followed by another six booster immunizations every other week for 12 weeks.
The idea here is to extend or even to prevent remission of AML. If it is shown to be working, levels of hTERT-specific T-cells could be measured in the patient’s blood. In fact, a secondary endpoint of the phase 2 trial (NCT00510133) was to detect twice the pre-vaccination level of these T-cells and presumably to ultimately associate or even correlate that to survival.
The company is scheduled to wrap up its process development of AST-VAC1 later this year. From that point, the company will have the option to move forward with a phase 2b trial or potentially try to partner this asset. Think of AST-VAC1 as another call option.
The Value Driver
Stem cells have long been thought of as a possible therapy for spinal cord injury. It’s a natural assumption because pluripotent cells have vigorous regenerative powers and can assume any cell phenotype (characteristic). The trick is to harness these little restorative factories to bring paralyzed patients back to partial or (at some point) even complete function.
Sophisticated investors are focusing on AST-OPC1, which is an allogeneic stem cell therapy of embryonic origin. Although these AST-OPC1 cells do not have the same genotype (gene sequence) of the patient into which they will be transplanted, there is long-established proof of concept that they are immune privileged. For example, an embryo or placenta does not have the same genome as its pregnant host, yet they are compatible and tolerated perfectly during gestation. Therefore, a spinal cord injury patient receiving AST-OPC1 will not require life-long immunosuppression as a kidney or liver transplant patient would require. So now you understand the operative theory of this program, and it is most definitely the value driver of Asterias’ shares.
How is AST-OPC1 working in the clinic?
On May 11 of this year the company announced important new findings from its ongoing phase 1/2a (NCT02302157) SCiStar clinical trial with AST-OPC1. These patients had been injured along the C-5 to C-7 cervical spinal cord level. As of July 10, the company announced that the SCiStar trial protocol had been amended for future patients to include C-4 to C-7 injuries, which will increase the cervical spine injury patient population.
Typically after a severe spinal cord injury, pockets of fluids or cavities begin to develop in the injured cord. These cavities represent a destructive, prohibitive barrier to natural healing, and their presence is one of the factors explaining why patients do not re-grow motor and sensory nerve connections and why these types of cord injuries characteristically result in permanent loss of motor and sensory function. Furthermore, cavitation can result in cyst formation in the spinal cord, which will become an additional barrier to healing.
- At six months post injection, meaning the transplantation of AST-OPC1 cells into the cord, a serial MRI study of those five patients with complete loss of motor and sensory function, i.e. the ASI-A group, (American Spinal Injury Association Impairment Scale-A) who had a single injection of a 10-million cell dose of AST-OPC1 (cohort 2), were shown to have no sign of the cavitation that would normally develop after a severe cord injury. Reiterating, this was a six-month follow-up.
- There were three patients in cohort 2 of the SCiStar study who had completed a 12-month follow-up, and again the serial MRI study showed no sign cavitation even after a full year.
- Moreover, even the three AIS-A patients in the very low-dose 2-million cell group (cohort 1) of SCiStar showed no signs of these lesions after 12 months.
These imaging results in humans are consistent with quite extensive pre-clinical data set in animals indicating that AST-OPC1 cells durably engraft and remain viable to assist in the prevention of cavitation in the vicinity of the lesion.
The company says these new findings support the safety and other data from AST-OPC1, and they also match the safety data from a phase 1 (NCT01217008) study that was completed in the summer of 2013, as well as preclinical data generated in more than 3,000 animals.
If this evidence holds true in larger studies, its importance cannot be overstated because the prevention of cavitation offers the key to a real solution to spinal cord injury.
The Holy Grail
Of course the proof that all paralyzed patients want to experience and that investors want to see is return of movement and feeling—reversal of paralysis. Can these devastating losses of function and feeling return? Can paralysis be reversed in humans?
On March 21, the company reported on the sixth and last patient in the complete loss of motor and sensory function (AIS-A) 10-million cell group (cohort 2). This particular patient’s hand and arm function had actually been deteriorating prior to receiving the AST-OPC1 injection. Yet, the patient demonstrated hand and arm motor function improvement three months after injection and further improvement after six months. This same patient’s upper extremity motor score (UEMS) improved by 9 points after six months. The average improvement for all six patients in this cohort was 9.7 points with a 9-point median improvement. All six patients in this cohort demonstrated early-on progress in UEMS improvement three months after injection of AST-OPC1. These improvements were persistent and demonstrated continued progress after six months.
This final patient in the AIS-A 10-million cell group (cohort 2) has thus far realized a one motor level improvement over baseline on both sides of his body, while all six patients in the group have now achieved at least a one motor level improvement over baseline on at least one side.
On June 13 the company presented 9-month, 10-million cell data from cohort 2 of the SCiStar study. Five of the six patients in the group completed their follow-up exam.
Half, or three, of the six patients realized two motor levels of improvement over baseline on at least one upper extremity at nine months. This represents an improvement vs. two out of six patients, a third of the cohort, who had achieved two motor levels of improvement on at least one side at three and six month follow-ups.
More importantly, all six patients in cohort 2 attained at least one motor level of progress on at least one at nine months.
At nine months, the average UEMS score observed for cohort 2 was 11.2 points, vs. 9.7 points at six months.
SCiStar is an open-label trial, and there is no blinded control (standard of care only with no cell therapy) cohort in the study. Therefore, there are only historical control data to measure against. At nine months, the SCiStar data show important progress vs. a group of 62 very similarly injured patients where only 29% of patients improved two motor levels on at least one side after one year. That compares to 50% of AIS-A patients who received AST-OPC1 cells and regained two motor levels of improvement on at least one side after one year.
Finally, safety is always the first concern, and after nine months, there have been no serious adverse events associated with transplantation of AST-OPC1 cells.
It’s important to note that these improvements have occurred after a single injection of 10 million AST-OPC1 cells. The five patients in cohort 3 (AIS-A) have received 20 million AST-OPC1 cells, but it is too early to assess the data or know whether 10 million or 20 million cells will be an optimal efficacious dose.
We have been hearing about stem cell therapies for neurological repair, including paralysis, for nearly three decades now. Clinical investigation in brand new areas of study traditionally begins with the most severe cases of long duration where all hope is lost. So, after significant failures in chronic spinal cord injury studies over the years, investigators are coming to the realization that old, chronic injuries that may have been sustained years ago, are not the ideal cases on which to attempt restoration of function. Old injuries have scarred and obliterated tissues within the cord, and they have become sclerotic with dense connective tissue and significant cavities obscuring the would-be axonal pathways. These chronic injuries have long since lost blood, nutrient, hydration and any semblance of a fresh matrix on which to re-grow neurons or myelinate fibers. Hence, the term subacute SCI, which is being defined for this study as an injury occurring 21-42 days prior to treatment. Previously the treatment window in the SCiStar trial had been 14-30 days post injury, but this newer, amended protocol still allows for a significantly vital regenerative matrix in the patient’s spinal cord, while investigators have the benefit of up to a 42-day period to find and enroll patients with the ideal inclusion criteria.
Asterias Biotherapeutics has earned a Strategic Partnerships Award grant from the California Institute for Regenerative Medicine (CIRM), which will provide $14.3 million of non-dilutive capital for the Phase 1/2a SCiStar clinical trial.
Currently Asterias is trading at a $162 million market cap. For the 52 week period ending August 2, 2017, the stock has gained 10.2% in market value, which closely mirrors performance NYSE ARCA Biotech Index (INDEXNYSEGIS:BTK)which has gained 12.73% during the same period. Wall Street has not been in love with stem cell stocks in many years, and the data need to be strong to move Asterias’ shares.
Because Asterias’ AST-OPC1 cells will be targeting subacute cases of spinal cord injury, the market potential must focus on the incidence of new spinal cord injuries. The annual incidence of spinal cord injury in the U.S. is 54 cases per million people in the U.S. alone. Given a 314 million person population in the U.S., that works out to about 17,000 new SCI cases per year, and this figure does not count the number of people with an SCI who die at the scene of the accident. According to the National Spinal Cord Injury Statistical Center (NSCISC), less than 1% of SCI patients discharged from a hospital experience complete recovery.
If Asterias could capture only 4,000 SCI patients with C4-C7 AIS-A/B/C, management believes that could be worth $1 billion in revenue. Additional SCIs in the C8 –T-12 levels could mean an additional $1 billion. But just basing valuation on a first indication and FDA approval of injuries to levels C4 — C7, a $5 billion market cap might be achievable. Given Asterias’ current market valuation of $162 million, a $5 billion market cap could give investors a 30x return on investment from today’s levels. Note that this is without expanding AST-OPC1 to any other disease indications, such as stroke, and it does not ascribe any value to the other two candidates in the Asterias pipeline. Additionally, these patient populations represent the U.S. only.
The link below is a promotional video from Asterias, and it contains a brief demonstration and interview with patient Kristopher Boesen who received AST-OPC1 cells following an auto accident which resulted in a spinal cord injury and paralysis from the neck down. He received 10 million AST-OPC1 cells via injection into his spinal cord. You can see the result. Please note that this single patient’s result is an anecdote and does not constitute data. Although this video does give patients, their parents and investors some idea of what might be expected, one should not invest based on this video alone. Keep in mind that Asterias is a speculative name. Do your own diligence.
Disclosure and Declaration
Dr. George S. Mack, the author of this report is an independent contractor. Dr. Mack was compensated by Sylva to author this report. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
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