Aastrom sinks after biotech flushes PhIII study for cardio therapy, halves staff
After a quick review, new CEO Nick Colangelo and his team have taken bold actions to set a new course for Aastrom Biosciences. The Ann Arbor, MI-based biotech has slammed the brakes on a Phase III study of its lead cellular therapy for critical limb ischemia. And the company ($ASTM) has reorganized R&D, slashing its workforce and expenses in half.
On the back of the news, Aastrom's share price fell below the $1 mark, dropping 33.94% as of 9:44 a.m. EST to $0.76 per share. The company operated with 71 employees, so about 35 workers will be shown the door.
Despite the immediate drop in share value, Aastrom's top brass touted the R&D rejig as a way to focus the company's resources on the development of its lead multicellular therapy known as ixmyelocel-T for an orphan cardiovascular condition known as dilated cardiomyopathy (DCM), for which the company has recently started a Phase IIb trial. Colangelo stated that the strategy shifts resources to "rare disease indications where clinical development may require smaller studies with lower costs and a shorter path to regulatory approval."
Yet it's unclear whether pursuit of the DCM treatment will provide the biotech with an earlier approval of ixmyelocel-T than the previous lead indication of critical limb ischemia. Last March the company raised $40 million in a financing with Eastern Capital to bankroll late-stage development of the cellular therapy, which is derived from a patient's own bone marrow and delivered back to him to repair diseased tissue.
The decision to halve Aastrom's staff and expenses comes less than a month after the company announced the appointment of industry veteran Colangelo as CEO, a post that previous chief executive Tim Mayleben left months earlier to helm and return to his previous biotech Esperion Therapeutics.
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