June 1, 2016
By Alex Keown, BioSpace.com Breaking News Staff
NEWARK, Calif. – Shares of StemCells, Inc. continue to fall after the company announced it will “wind down operations” following disappointing results of a Phase II spinal cord injury therapy study.
StemCells said it has cash and cash equivalents of approximately $5.5 million on hand as of May 31. The company said it cannot “determine with certainty the amount of any liquidating distribution to its stockholders and it is possible that there will be no liquidating distribution to stockholders.” StemCells said it will “evaluate opportunities to monetize its intellectual property, including data collected in its studies and trade secrets, as well as the transfer of its proprietary HuCNS-SC cells and other assets through a potential sale.” StemCells HuCNS-SC platform uses human neural stem cells, which are extracted from fetal brain tissue from surgical abortions. The treatment is designed to produce myelin, an insulating layer surrounding neurons, for patients with paralyzing neck injuries.
The company will terminate its remaining 50 employees by summer’s end, StemCells said. Last year the company terminated about 25 percent of its employees following a realignment it believed would save about $20 million over the next two years. In December, StemCells announced a realignment that included the suspension of a mid-stage trial for a therapy for macular degeneration in favor of the company’s HuCNS-SC platform technology for the treatment of chronic spinal cord injury (SCI). The company said clinical trials have shown its technology “offers therapeutic promise to restore lost function previously considered unrecoverable.” At the time of the realignment, StemCells said it anticipated the maneuver would be able to use the savings to move its spinal cord treatment into a Phase III trial.
StemCells Phase II spinal cord therapy trial did not show significant results in treating spinal cord injuries to justify the continuation of the study, the company said. Even if the study were to be continued, StemCells said it was unlikely the study would yield the positive results interim data released last year hinted at.
“We are extremely disappointed with the results of our Pathway Study, which we had hoped to be the first clinical program involving cellular transplantation to meaningfully improve motor function in patients with chronic spinal cord injury,” Ian Massey, StemCell’s president and chief executive officer, said in a statement. “However, we continue to feel immense pride over the contributions we have made to the stem cell research field, and we are confident that the progress we made will be instrumental in future studies in this area. The other directors and I are also very appreciative of our employees for their hard work and dedication to our mission, and thankful to the scientific community and our stockholders for their support through the years.”
Although the HuCNS-SC platform did not yield the results StemCells hoped for, Stephen Huhn, the company’s chief medical officer, said there was scientific value in the program. Huhn said early clinical data showed the stem cell platform demonstrated an “early signal of biological activity” in multiple disease indications, including Batten disease in children. A Phase I study in Batten disease showed that transplantation of the cells into the brain was safe and resulted in long term survival of the cells, Huhn said in a statement.
