Staff Writer

SAN FRANCISCO – Cephalon Inc.'s new CEO J. Kevin Buchi told attendees at the J.P. Morgan Healthcare conference that he knew what many people would think when they saw a press release about positive interim results from an ongoing multicenter Phase II trial of its "off-the-shelf" adult stem cell product Revascor for patients with congestive heart failure.

Their reaction: "Stem cells . . . pshhhhhh," said Buchi, exhaling in a loud, exasperated manner. "But this data is compelling. . . . It is very hard to explain away."

The Revascor data were a nice addition to Buchi's first J.P. Morgan Healthcare conference presentation as CEO, a job he got in late December following the death of Cephalon founder, Chairman and CEO Frank Baldino.

"His vision remains alive," said Buchi, who has been with Cephalon for almost 20 years, as he began the presentation late Monday afternoon.

Earlier in the day, Cephalon, of Frazer, Pa., and partner Mesoblast Ltd., of Melbourne, Australia, reported that all 45 patients in a Phase II trial who received a single injection of Revascor into damaged heart muscle have had less cardiac events, deaths and hospitalizations during the follow-up period to date than control patients.

Cephalon shares (NASDAQ:CEPH) were up 64 cents, to close at $60.22 on Tuesday.

Cephalon and Mesoblast last month entered into a potential billion-dollar strategic alliance to develop and commercialize Mesoblast's Mesenchymal Precursor Cell (MPC) therapeutics for hematopoietic stem cell transplantation in cancer patients, as well as degenerative conditions of the central nervous and cardiovascular systems, including congestive heart failure.

Cephalon acquired the rights to stem cell technologies from Mesoblast for $130 million up front in addition to the purchase of $220 million in stock and future milestone payments worth up to $1.7 billion. It was one of the year's richest biotech deals and believed to be the largest regenerative medicine transaction ever. (See BioWorld Today, Dec. 9, 2010.)

The companies said that Mesoblast is evaluating the safety and efficacy of Revascor in a randomized, placebo-controlled Phase II trial in 60 patients with moderate-severe congestive heart failure.

A single injection of Revascor at one of three progressively increasing doses has been administered to 45 patients randomized to receive cell therapy in addition to standard of care, while 15 control patients have been concomitantly randomized to receive standard of care alone, the companies said. The trial will be completed when all available patients have been followed up for 12 months.

The companies said that a scheduled interim analysis of safety and of time-dependent hard efficacy endpoints was performed when the last of the 60 enrolled patients had completed six months of follow-up in December 2010, when the 45 patients who received Revascor had been followed for a mean of 18.5 months/patient and the 15 controls had been followed for a mean of 18 months/patient.

The companies reported no cell-related adverse events in any of the 45 patients treated with Revascor demonstrating that all three doses of the cell therapy product are safe over both the short and medium term.

Analyses of time-dependent hard efficacy endpoints showed that a single injection of Revascor significantly reduced the number of patients who developed any severe adverse cardiac events over the follow-up period from 93.3 percent in the control group to 44.4 percent in the treated patients (p = 0.001), the companies said.

Revascor also significantly reduced the number of patients who developed any major adverse cardiac events (MACE, defined as the composite of cardiac death, heart attack or coronary revascularization procedures) from 40 percent to 6.7 percent (p = 0.005), they said.

Moreover, a single injection of Revascor reduced the overall monthly event rate of a MACE by 84 percent compared with controls (p = 0.01), and every dose tested demonstrated a similar protective effect, they said. Death from cardiac causes was reduced from 13.3 percent to zero over the period (p = 0.059) and the overall monthly rate of cardiac-related hospitalizations was reduced by 48 percent (p = 0.07).

Lesley Russell, Cephalon executive vice president and chief medical officer noted that "the lowest dose was as good as the highest." The next step is to advance to a Phase III pivotal trial, she said.

Jefferies & Co. analyst Corey Davis said that the "stunning [Phase II] stem cell data in CHF came at an opportune time. . . . The seemingly expensive deal CEPH announced with Mesoblast in December makes more sense now that it has revealed Phase II data with stem cells for heart failure. The exceptional effect size appears to evoke images of Ponce de Leon's fountain of youth by growing healthy new heart cells."