Buffeted by disappointing enrollment in a Phase III study and widening losses, Aastrom Biosciences’s new president and CEO said today the company has begun laying off about half its workforce and slashing its operating expenses by half after ending a late-stage clinical trial for the critical limb ischemia (CLI) drug candidate ixmyelocel-T.
The company—which according to Thomson Reuters data has 71 employees—said it was halting enrollment in its Phase III REVIVE clinical trial after evaluating what it called challenges in enrolling patients in the study, and concluding that the CLI program would not find support from a partner quickly enough to speed up the pace of enrollment.
As of earlier this month, only 40 patients were enrolled—14 more than in the third quarter of 2012, but a long way from REVIVE’s goal of 594 patients. Aastrom said it was making changes designed to spur patient enrollment.
“We are no longer projecting ixmyelocel-T launching in the CLI market by 2017,” investment firm MLV & Co. concluded. MLV on March 20 downgraded its rating of Aastrom shares from “Buy” to “Hold,” and lowered its price target on company shares from $5.50 to $1.50.
The downgrade came two days after Aastrom reported having finished the fourth quarter of 2012 with a $7.9 million net loss, compared with a $2.8 million net loss in Q4 2011. For all of 2012, Aastrom lost $33.5 million, nearly double the $19.7 million net loss of the previous year.
The company blamed its losses on a noncash change in the fair value of its warrants, a noncash accretion of convertible preferred stock, and rising research and development expenses. The R&D spending reflected the REVIVE clinical trial, as well as higher noncash stock-based compensation expenses, and the launch of a Phase IIb study for its lead product, ixmyelocel-T for dilated cardiomyopathy (DCM).
Aastrom reported its Q4 and 2012 results two days after naming Dominick C. (Nick) Colangelo as president and CEO. Colangelo was previously president and CEO of Promedior, a developer of protein therapeutics for fibrovascular diseases, and holds more than 20 years of executive management and corporate development experience in the pharma industry, including nearly a decade at Eli Lilly. Colangelo followed an interim CEO, Dan Orlando, and succeeded Tim Mayleben, whose retirement the company announced in December.
In a March 18 conference call with analysts, Colangelo articulated his goals as “accelerating the clinical development and commercialization of ixmyelocel-T, and ultimately, to broaden Aastrom's product portfolio by applying our technology platform to new areas of unmet medical need. All of these goals are achievable but they will take some time to accomplish,” according to a transcript published at SeekingAlpha.com.
But in today’s announcement, Colangelo said Aastrom will switch its activity focus to clinical development of inxyelocal-T for DCM, with plans “within the next few weeks” to begin treating patients in the Phase IIb study, dubbed ixCELL-DCM.
“We have determined that the optimal use of our resources at this time is to focus on the development of ixmyelocel-T for DCM and other rare disease indications where clinical development may require smaller studies with lower costs and a shorter path to regulatory approval,” Colangelo said in a statement. “I believe this is the right course of action for our company and the best way to create sustainable long-term value for our shareholders."
Colangelo cited Aastrom’s earlier Phase IIa DCM clinical trials, which showed ixmyelocel-T was well tolerated and linked the drug to improved function of impaired myocardium in patients with DCM. He also cited preclinical results demonstrating that ixmyelocel-T was protective of ischemic heart tissue in a murine model of heart failure.
“These findings strongly support the decision to focus our resources on the development of ixmyelocel-T for the DCM orphan indication," he said.
In ixCELL-DCM, approximately 108 patients will be enrolled at about 30 sites in the U.S. Ixmyelocel-T will be administered via catheter-based injections to patients with advanced heart failure due to ischemic DCM. The primary endpoint of the trial is the average number of events per patient, which include all-cause mortality, all-cause hospitalizations, or unplanned hospital visits to treat worsening heart failure. Patients will be followed for a total of 12 months.
The company also plans to continue exploring the use of its Aastrom Replicell system to develop new cell therapy products for other areas of unmet medical need, Colangelo added.