Sanofi Failure Opens Door for Aastrom Bio

This morning Sanofi-Aventis and Vical (VICL) announced that their late-stage candidate, Temusi (NV1-FGF), failed a phase III program in patients with severe peripheral arterial disease (PAD). The 525-patient program was designed to show superiority of Temusi versus placebo in preventing amputations and death in patients with Critical Limb Ischemia (CLI), the most advanced form of PAD.

Temusi is an angiogenic (gene) therapy encoding Fibroblast Growth Factor 1 that has demonstrated ability to induce local growth of blood vessels and restore blood flow to limbs affected by ischemia in earlier-stage trials. Vical licensed Termusi to Sanofi-Aventis for development and commercialization.

The failure of Temusi in a phase III program for CLI opens the door for Aastrom Biosciences (ASTM) and their phase III ready autologous cell therapy treatment. Aastrom presented very encouraging data from a phase IIb program called RESTORE-CLI in June 2010.

RESTORE-CLI was an 86-patient program across 18-clinical sites studying Aastrom’s cardiac repair cells versus a control on a number of clinically-validated endpoints in patients with CLI, including amputation-free survival, major amputations, wound healing, wound size, de novo gangrene and death. The data showed clear positive advantages for Aastrom’s cell therapy, including statistical significance on the cumulative composite endpoint and amputation-free survival. Management plans to present additional data from the RESTORE-CLI program in November 2010.

Critical limb ischemia (CLI) affects approximately 1 million people in the U.S. each year — roughly 2% of the population over the age of 50. Over 25% of patients with PAD will eventually development CLI. CLI is defined as inadequate blood flow to the limbs, and if left untreated can result in tissue loss, gangrene, amputation and death. In fact, CLI leads to an average of 150,000 major limb amputations each year.

CLI has a high mortality rate: 20% after 6-months after initial diagnosis and 25% after 12-months. Nearly 30% of all patients who undergo a major limb amputation will require another amputation at some point in the future. The mortality rate post-amputation remains high, at roughly 25%.

Therapeutic options for patients with CLI are limited. Besides being at significantly increased risk for heart attack, stroke or vascular death, patients with CLI often live with several other co-morbidities, including diabetes, angina, dyslipidemia, hypertension and renal disease.

For less severe forms of PAD, physicians will typically recommend smoking cessation (when applicable), and changes to diet and exercise. Medications such as aspirin, statins and clopidogrel (Plavix) are common first-line therapies for early-stage PAD. Many patients will also be on medications for diabetes and heart failure as well.

However, once PAD progresses to the point of CLI, the only real options available to patients are surgical. Patients are passed from the cardiologist, diabetologist or podiatrist to the care of the vascular surgeon. Surgical procedures include percutaneous transluminal angioplasty, plaque excision, stenting and bypass grafting. Patients living with CLI suffer from severe pain as a result of the neuropathy, tissue loss and ischemia.

Sanofi’s failure leaves the door wide-open for Aastrom Bio. Aastrom plans to move into a pivotal phase III program with its autologous stem cell therapy for CLI during the first half of 2011. The company is currently in discussions with the U.S. FDA on the filing of a special protocol assessment (SPA) for the phase III program. We expect this filing to take place in October 2010. We expect amputation-free survival to be the primary endpoint of the phase III program.

Aastrom has already filed for Fast Track development status with the FDA. We expect the FDA to grant Fast Track development given the significant lack of treatment options available to patients with CLI. The healthcare burden associated with PAD-related amputations in the U.S. is greater than $10 billion per year. This is an enormous opportunity for Aastrom Bio, and one we recommend investors keep an eye on.

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