Athersys Reports Wider-than-Expected Q1 Loss


Athersys, Inc.’s (ATHX) first quarter 2014 net loss of 15 cents per share was wider than the Zacks Consensus Estimate of a loss of 9 cents. The company had suffered a loss of 18 cents per share in the year-ago quarter.

Revenues increased to $0.7 million from $0.3 million recorded a year ago, driven by higher grant revenues.

Research and development (R&D) expenses for the first quarter of 2014 increased 11.7% to $6.2 million, driven by higher patent related fees, personnel costs and stock based compensation expenses. General administrative expenses at Athersys climbed 18.2% to $1.8 million in the first quarter of 2014. Higher stock-based compensation expense and personnel costs led to the increase.

Athersys is developing MultiStem cell therapy for ulcerative colitis in collaboration with Pfizer Inc. (PFE). Earlier, in Apr 2014, the companies had reported interim 8-week results from the phase II study on MultiStem cell therapy to treat refractory ulcerative colitis. Although the candidate demonstrated favorable safety and tolerability, it failed to meet the primary endpoint of significant improvement over placebo.

The phase II study is ongoing and complete data is expected later this year. Even though the data will not change the overall outcome, it will provide an insight into the candidate.

MultiStem cell therapy is also being evaluated for several indications including ischemic stroke (phase II: enrollment expected to complete by the end of summer) and acute myocardial infarction (a phase II study expected to be initiated later in 2014). We expect investor focus to remain on MultiStem cell therapy in the near term.

Athersys carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the healthcare sector include Allergan Inc. (AGN) and Gilead Sciences Inc. (GILD). While Allergan carries a Zacks Rank #2, Gilead Sciences carries a Zacks Rank #1 (Strong Buy).

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