Athersys’ woes continue as Aspire Capital axes its relationship with the biotech

08 Jul 2022
endpts.com
CollaborateCell Therapy
While Athersys has been in the penny stock twilight zone since 2021, the company has hit several major speed bumps in the past few months and this latest piece of news is another hit against the biotech. On Friday, the Cleveland-based biotech announced that its equity purchase agreement with Aspire Capital Fund has been terminated. According to the company, there were several discussions with Aspire Capital before the biotech received a notice on Wednesday of the immediate termination of the agreement, which had been in place since May 12. Athersys said that it will continue to evaluate alternative financing options to support its ongoing operations and CEO Dan Camardo said in a statement that more succinct details will be provided at its stockholder meeting later this month. “As we execute on our transformation plan, which includes reducing expenses across several areas, we will continue to explore financing options that we believe are in the best interest of our shareholders,” Camardo said in a statement. The company is now searching for a permanent CFO, but for now, Camardo will act as the principal financial officer and the principal accounting officer. Camardo will not receive any additional compensation or benefits in connection with this designation. According to the equity purchase agreement filed with the SEC, Aspire Capital initially offered up to $100 million in an aggregate amount of shares of its common stock with a value of $0.001 per share to Aspire Capital under a common stock purchase agreement. The agreement would allow the stock to be sold from time to time to Aspire Capital over the term of the purchase agreement, which would expire in 2024. However, this is a major hit to the company. As presented in its Form 10-K in March , the company will need more funding to advance its product candidates through development and commercialization as well as for other activities. But funding is not the only struggle the company has encountered. In May, the company’s principal stem cell therapy product failed yet again. In a 206-person trial conducted in Japan, Athersys’ stem cell therapy for stroke failed its primary endpoint of “excellent outcome,” a combined measure of three stroke recovery scores. In May , the company dressed up a post-hoc analysis, picking out a subset of younger patients to show where their treatment had an effect. The results only approached but did not reach statistical significance. In 2015, Athersys’ treatment for stroke recovery failed a Phase II study but is still forging ahead with a Phase III trial for approval in the US that is expected to finish next year. In early June , the company laid off 70% of its workforce with two executives leaving, to save some cash. However, these moves have certainly not helped the company’s investors, as its stock price $ATHX sits well into the penny stock range at below $.30 and has dropped 75% since January.
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