Pivotal data overshadows Vericel’s heart failure win
Vericel’s huge rise on positive heart failure data for ixmyelocel-T is a remarkable rebound for a group that three years ago had a housecleaning after pulling the plug on a phase III trial in critical limb ischaemia.
The project’s development may depend on events beyond its control, however, as potential partners may want to see upcoming phase III data from the most-advanced cell therapy in cardiovascular disease, Celyad’s C-Cure, before betting on Vericel. With shares having returned to mid-2014 levels, Vericel may want to hit investors for a cash infusion to prepare for a solo pivotal programme in the event C-Cure crashes out.
One for the heart?
Ixmyelocel-T, an autologous, bone-marrow-derived cell therapy, showed a statistically significant benefit over placebo on survival and cardiovascular hospitalisations and interventions in patients with advanced heart failure due to ischaemic dilated cardiomyopathy. Vericel said full data from the phase IIb ixCELL-DCM trial will be presented as a late-breaking trial at the American College of Cardiology meeting in Chicago in April.
Shares rose 86% to $3.95 following yesterday’s announcement, and were up another 14% to $4.49 in early trading today, taking Vericel to levels last seen nearly two years ago. The Massachusetts-based group had slumped in tandem with the larger biotechnology market in late 2015 and early this year.
Vericel’s announcement did not make explicit any plans to move into phase III, although with a fourth quarter earnings call scheduled for Monday, the company may say more. Ixmyelocel-T has failed once in phase III, in critical limb ischaemia, an event that prompted the company, then called Aastrom Biosciences, to lay off half its staff and refocus its strategy (All change at Aastrom leaves shares out on a limb, March 28, 2013).
One component of that strategy was to focus on the dilated cardiomyopathy population, for which it has orphan drug designation and thus could have a shortened clinical and regulatory pathway. The other was to buy Sanofi’s cell therapy and regenerative medicine business unit, which the French group acquired with Genzyme, for the surprisingly low sum of $6.5m – the two agents Carticel and Epicel acquired in this transaction brought in sales of $35m in the first nine months of 2015.
Even with that revenue stream, Vericel’s cash pile was down to $18.7m as of September 30. The group announced a $15m credit arrangement with Silicon Valley Bank earlier this week – however, with shares now buoyed by positive ixelomyocel-T, Vericel may want to top up its borrowing power with a secondary share offering.
Strike while the iron is hot
The reason is this: if there is one thing that Mesoblast, Celyad, Bioheart and others have demonstrated, a cell therapy can show sufficient benefit in phase II to justify advancing into pivotal study. The trick, of course, is proving that one can have a meaningful clinical benefit across a big population, something the sector very well may know soon as Celyad’s Chart-1 trial nears readout.
If it is successful, it could stoke interest for Celyad’s candidate as well as other unpartnered projects in this space, such as Vericel’s. If not, Vericel may need to prepare itself to go it alone in phase III, as Celyad did.
Celyad’s European-directed Chart-1 trial is due for a readout in mid-2016. Vericel may not want to wait around that long before it budgets for a phase III, however. With the biotech markets this volatile, striking with a fundraising while shares are at this price may be a wise move.