Cytori shares slammed as safety concerns halt stem cell trials

Cytori Therapeutics ($CYTX) hit the brakes on a pair of clinical trials to find out why three patients in the study suffered from "cerebrovascular" events after they were treated with the biotech's experimental stem cell treatment. The San Diego-based biotech's shares plunged more than 30% in after-hours trading after putting out word of the hold in a late release.

Cytori makes a regenerative concoction out of fat tissue, extracting stem cells from patients which are then injected into patients to treat various medical conditions. These two trials were focused on cardiac patients, and Cytori was hoping to gather evidence that the treatments could revive damaged tissue and help patients recover from a cardiac event. There was no explanation in the release about what kind of cerebrovascular events were involved, but the company did say that two of the incidents were quickly resolved while a third patient was still recovering.

"Such events had not been previously reported in Cytori's other cardiovascular trials and appear to be related in part to the medical co-morbidities in the treated population and the complex nature of the procedures involved in the trial," Cytori reported.

Stem cell therapies were hot in the last decade but suffered a decline in recent years as investors woke up to the lengthy timelines and big costs involved in getting a treatment through the clinic and into the hands of regulators.

Scripps investigator Richard Schatz told the San Diego Union-Tribune back in the spring of 2013 that the Cytori treatment faced a long road in the clinic before it could be approved.

"We don't want to give false hope to people," Schatz told a reporter. "These trials take 10 to 15 years to do. It's just honest to let them know it is an experimental trial."

That timeline just got a little longer.

- here's the release