Vericel Corp. CEO Nick Colangelo told BioWorld Today the strong top-line phase IIb results with ixmyelocel-T in patients with advanced heart failure due to ischemic dilated cardiomyopathy (DCM) add momentum to the turnaround begun in 2014 when the firm then known as Aastrom Biosciences Inc. bought Sanofi SA's cell therapy and regenerative medicine business, including marketed products for skin replacement and joint repair.
"We've got a robust commercial organization doing north of $50 million in revenues a year, and a high-potential pipeline, particularly now with ixmyelocel-T," Colangelo said. "In terms of companies that are out there on the leading edge of cell therapies, I don't think there's one that's got a commercial business like we have, and as exciting a pipeline."
Wall Street seemed to agree. Cambridge, Mass.-based Vericel shares (NASDAQ:VCEL) closed Thursday at $3.95, up $1.83, or 86.3 percent, after trading as high as $4.90, beating the previous 52-week top price of $4.34.
Ixmyelocel-T is Vericel's therapy manufactured from the patient's own bone marrow, by way of a process that selectively expands the population of mesenchymal stromal cells and alternatively activated macrophages. U.S. regulators have awarded the treatment orphan drug status in DCM. Vericel decided to concentrate on DCM and restructure in 2013, when a phase III trial in critical limb ischemia ended because of enrollment difficulties. (See BioWorld Today, March 28, 2013.)
"We just unblinded the results this week, so there are a lot of strategic decisions to be made," Colangelo said. "We will be looking at our regulatory strategy in the U.S., Japan which provides an expedited approval pathway for cell therapies and Europe, which has conditional approval pathways that we certainly want to explore. We don't yet know, and we won't know, what the path is in the U.S. until we have an opportunity to meet with the FDA."
A number of other players are researching DCM, but "our chief medical officer mentions to us often that when he started practicing medicine 30 years ago, there wasn't much for heart failure, and guess what, there's not much more today than there was back then." The FDA last summer approved Basel, Switzerland-based Novartis AG's Entresto (sacubitril/valsartan), a combination ACE/neprilysin inhibitor, "but there hasn't been very much success in terms of conventional therapies for this disease," he said. (See BioWorld Today, July 9, 2015.)
The phase IIb trial with ixmyelocel-T, called ixCELL-DCM, met its primary endpoint of reduction in deaths, cardiovascular hospitalizations or unplanned outpatient and emergency department visits to treat acute, decompensated heart failure during the 12 months following treatment with ixmyelocel-T compared to placebo. Adverse events in both groups turned up comparable. Vericel will roll out full data during the American College of Cardiology 65th Annual Scientific Session & Expo early next month in Chicago.
NEW DAY, ALTERED STRATEGY
In the transaction with Paris-based Sanofi, then-Aastrom (located at the time in Ann Arbor, Mich.), paid $6.5 million, including $4 million in cash at closing and $2.5 million payable in the form of a promissory note, and took aboard global commercial rights to three marketed autologous cell therapy products: Carticel (autologous cultured chondrocytes) is an autologous implant for articular cartilage defects; Epicel (cultured epidermal autografts), a permanent skin replacement for full-thickness burns greater than or equal to 30 percent of total body surface area; and, MACI (matrix-induced autologous chondrocyte implant), a third-generation product marketed in the European Union. Earlier this week, Vericel said the FDA accepted for filing its biologics license application (BLA) for MACI, which is intended for the treatment of symptomatic cartilage defects of the knee in adult patients. The PDUFA date is Jan. 3, 2017, and will not involve an advisory committee meeting. (See BioWorld Today, Feb. 17, 2011.)
"There was a question when we bought the business of whether we would have to do additional clinical work in the U.S." with MACI, Colangelo said. "We felt we had a package that would support the filing of the BLA, and that's exactly what happened." When the trio of products landed in his firm's hands, they were selling about $42 million a year vs. the trailing 12-month revenues of $50 million for the third quarter of 2015 on Vericel's watch. The company will report fourth quarter earnings Monday.
Another regulatory win came last month, when the FDA approved the company's humanitarian device exemption supplement for Epicel to revise the labeled indications and specifically include pediatric patients. The revised label also specifies that the probable benefit of Epicel, mainly related to survival, was proved in two clinical experience databases as well as a randomized, controlled, independent physician-sponsored study comparing outcomes in patients with severe burns treated with Epicel and standard care compared to standard care alone. The expanded label "really allows us to leapfrog over the competition and accelerate our time to market," he said.
Among Vericel's main competitors in DCM, Colangelo identified Mesoblast Ltd., of Melbourne, Australia, which has won the FDA's support of a plan to nearly halve the size of an ongoing phase III study in chronic heart failure and alter the endpoint. The mesenchymal cell-based medicine MPC-150-IM, partnered with Petah Tikva, Israel-based Teva Pharmaceutical Industries Ltd., was slated to be tested in 1,165 patients, tracking the time until their first hospitalization during the study. Under the new scheme, the experiment will enroll about 600 and track them over multiple heart failure-related events requiring hospitalization, with a view to comparing the number of re-hospitalizations between the treatment and control arms in the study. A second confirmatory study will be conducted in parallel in an identical patient population of about 600 subjects using the same primary endpoint. (See BioWorld Today, Jan. 13, 2016.)
Colangelo also named Celyad SA, of Mont-Saint-Guibert, Belgium, and Cleveland-based Athersys Inc.
Also this week, Vericel signed a term loan and revolving line of credit agreement with Silicon Valley Bank, providing access to as much as $15 million of new capital for general corporate purposes. "It's pretty small, when you're talking about a business with $50 million-plus in revenues, having the ability to access we didn't even take it yet a $5 million term loan," Colangelo said. "We have this core commercial business that's growing, and that's just a great tool for us, prior to this [phase IIb] news, to manage cash flow and not have to raise any additional equity. Obviously, things change a little bit when you say, 'Whoa, we just got great results in this phase IIb study,'" and "strategic decisions around how we move the program forward" may well take a different turn, he said. "Our financing strategy will be dictated by what the regulatory pathways are in each of the geographies, and on our partnering discussions as well. One of the reasons we have done the deal with Silicon Valley Bank is that it was nondilutive to our shareholders. We're very sensitive to dilution."
Would-be partners will be sorted. In Japan, especially, "there's a lot of local expertise that's needed," and a collaborator there is "certainly something we would consider," as well as in Europe, he said, adding that the orphan indication "gives us some flexibility on how we might approach that."