StemCells (STEM) to Suspend Phase II Radiant Study in GA-AMD, Cut Workforce by 25%

December 23, 2015 8:07 AM EST
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StemCells, Inc. (NASDAQ: STEM) today announced a strategic realignment to fully focus the Company’s resources on its proprietary HuCNS-SC® platform technology for the treatment of chronic spinal cord injury (SCI).

Evidence of efficacy from the Company’s ongoing clinical trials in chronic SCI offers therapeutic promise to restore lost function previously considered unrecoverable. StemCells recently reported a pattern of improvements in both strength and motor function, six months post-transplant of its proprietary HuCNS-SC cells, in the first cohort of its Phase II Pathway™ Study in cervical spinal cord injury. These interim findings are especially compelling given that all patients were treated between 10 to 23 months post-injury. Spontaneous motor recovery is not expected in SCI at this late stage after injury. Moreover, the emerging Phase II data are consistent with the evolution of positive outcomes seen in the Company’s previous Phase I/II study in thoracic SCI, in which measurable sensory gains were reported in the majority of patients, and two of the seven patients enrolled with complete injuries (AIS A) converted to incomplete injuries (AIS B).

“The decision to prioritize our spinal cord injury program required some difficult choices, including the suspension of the Company’s Phase II Radiant™ Study in geographic atrophy of age-related macular degeneration (GA-AMD) while we seek a partner to fund continued development in retinal disorders,” said StemCells’ CEO Martin McGlynn. “Given the strength of our clinical findings for the safety and preliminary efficacy of our HuCNS-SC platform technology in treating chronic spinal cord injury, we have decided that now is the time to narrow our focus. Our overall mission remains the same: to realize the full potential of cell-based therapeutics as a one-time intervention yielding a long-term benefit for millions of patients affected by intractable diseases and disorders of the central nervous system. While our programs addressing neurodegenerative diseases and retinal disorders have also shown great promise, we have concluded that the most effective way to accomplish our objective is by concentrating our limited corporate resources on the program with which we are making the most rapid progress — chronic spinal cord injury.”

The plan announced today, which is estimated to yield a cost reduction of approximately $20 million over the next two years, will allow the Company to expedite completion of its ongoing Phase II Pathway Study and commencement of a pivotal Phase III clinical trial in chronic spinal cord injury.

Key elements of the plan include:

  • Immediate suspension of the Company’s Phase II Radiant Study in GA-AMD, which entails curtailing further patient enrollment and service agreements related to the AMD program.
  • A workforce reduction of approximately 25%, which is planned to be completed by January 31, 2016. The Company estimates it will incur restructuring charges of approximately $400,000 in Q1 2016 in connection with one-time employee termination costs, including severance and other benefits.
  • Ongoing efforts to monetize certain of the Company’s technology assets, which may include partnerships, strategic alliances, out-licenses of non-core intellectual property, and the pursuit of both non-dilutive and creative product-specific financing alternatives.

These measures will enable the Company to:

  • Reduce cash needs and reliance on capital markets.
  • Expedite enrollment in the ongoing Phase II Pathway Study in spinal cord injury, facilitating completion in 2016.
  • Enhance process development activities supporting commercial scale production of HuCNS-SC cells before the initiation of a Phase III study in SCI.

“We have sound reason for high confidence in our SCI program,” McGlynn noted. “We believe this singular focus on chronic spinal cord injury is the right course of action for our Company, as it expedites the opportunity to demonstrate clinical proof-of-concept for our lead product candidate, thereby best serving the patients who would benefit, while creating substantial long-term value for our stockholders as early as possible.

“We wish to thank the patients and clinicians who have participated in our clinical studies to date, as well as the many dedicated colleagues who have been instrumental in achieving our successes thus far. Our hope is that by focusing now on our most advanced program, we will be paving the way to further address other disorders in the future.”

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