Athersys files for bankruptcy, sells assets to Healios in wake of stroke cell therapy’s struggles

After Athersys made a last-ditch attempt in the fall to salvage the company in the wake of an unsatisfactory trial of an ischemic stroke cell therapy, the biotech has decided to sell all assets to Healios and file for bankruptcy.

The final blow for Athersys came in October when an interim analysis of a phase 3 trial of the MultiStem therapy found it had not reached a sufficient sample size to achieve the primary endpoint. It was only the latest setback for the Cleveland-based company, which had already suffered massive layoffs, a failed Japanese trial and the loss of a key funding partner in the previous year and a half.

The company spent the following months “engaged in exploring strategic options with interested parties to determine the best path forward for MultiStem and Athersys.” With those avenues explored, Athersys filed for Chapter 11 at the U.S. Bankruptcy Court for the Northern District of Ohio on Friday, according to an SEC filing (PDF).

Athersys’ partner Healios had given some financial help back in October in the form of a memorandum of understanding offering global rights to develop and commercialize MultiStem in acute respiratory distress syndrome. With Athersys’ days now numbered, Healios has swooped in and bought up all of the biotech’s assets for $2 million via a credit bid.

MultiStem is an off-the-shelf cell therapy to promote tissue repair and healing in a variety of ways, such as in response to signals of inflammation and tissue damage. Trouble began for Athersys back in May 2022 when the therapy failed a phase 2/3 stroke trial being conducted by Healios in Japan. The therapy did not show a statistically significant achievement of the primary endpoint of an “excellent outcome” at 90 days.

Weeks after the failure, Athersys laid off 70% of staff including most of its C-suite. That would later prove to be a crucial error, as Aspire Capital Fund cut its funding of the biotech in July 2022. The firm had purchased shares with a caveat that it could cut and run under a range of circumstances, including the departure of any of Athersys’ then-current executive officers for any reason.

Athersys’ luck didn’t return when it tried to de-risk the MASTERS-2 trial, meeting with experts to come up with a protocol amendment that the FDA later cleared. The phase 3 trial’s primary endpoint assessment of mRS Shift analysis—a commonly used measurement of stroke outcomes—was changed from day 90 to day 365. The company also removed some exclusion criteria to better reflect standard of care and set up plans to have the interim analysis completed to ensure the patient population is sufficient.

Despite those efforts, the biotech announced in October that the analysis by an independent data safety monitoring board had determined that the sample size of 300 patients was insufficiently powered for the primary endpoint.