HHealios K.K. and Athersys, Inc. announced a partnership and license agreement that will focus on the development and commercialization of novel cell therapy treatments, including MultiStem® for the treatment of ischemic stroke and potentially other indications, in Japan. The partnership involves MultiStem, a proprietary, patented off-the-shelf stem cell therapy being developed by Athersys, with an initial focus on treating ischemic stroke. Under the terms of the agreement, Healios will gain exclusive rights for the development of MultiStem for treating ischemic stroke in Japan. Healios will develop and commercialize the product in Japan, and Athersys will provide the manufactured product and support to Healios, while retaining all rights outside of Japan.

In addition, Healios will obtain an exclusive option for development of two additional MultiStem clinical indications in Japan, including the treatment of Acute Respiratory Distress Syndrome (‘ARDS'), which is currently in clinical development by Athersys in the United States and the United Kingdom, and another indication in the orthopedic area. Healios will also obtain an exclusive license to incorporate Athersys technology in the development and commercialization of its proprietary Healios “organ bud” technology, initially for transplantation to treat liver disease or dysfunction, which may be expanded upon exercise of the option. As part of the license, Athersys will receive an initial license fee of $15 million, as well as have the opportunity to earn milestone and royalty payments upon the successful accomplishment of specific development and commercialization objectives, including the achievement of certain sales milestones.  Development and approval milestones for stroke could total $30 million, in addition to sales milestones that could reach $185 million based on successful commercialization and the achievement of substantial sales of an approved product for treating stroke in Japan.

Athersys will also receive tiered, double-digit royalties increasing into the high teens on product sales and will be responsible for providing manufactured product to Healios, subject to receiving reimbursement under a manufacturing supply arrangement. Furthermore, if Healios elects to expand the partnership following the successful completion of Athersys' ongoing clinical trial in ARDS, Athersys will receive a license expansion fee of $10 million for the exclusive rights to two additional indications in Japan, with the corresponding potential for further milestones based on successful achievement of specific development and commercialization objectives. As part of the expanded alliance, Healios will also have the right to incorporate Athersys technology in other organ bud indications. Athersys' proprietary cell therapy product, MultiStem, has been evaluated in a Phase 2 clinical study for ischemic stroke in the U.S. and U.K. and is also in clinical development in several other indication areas, including the treatment of ARDS, myocardial infarction, and for transplant support, including prevention of Graft versus Host Disease and liver transplant support.

Athersys has begun preparations for clinical development in Japan, including engagement with the Pharmaceuticals and Medical Devices Agency in Japan (“PMDA”). Healios and Athersys have already met jointly with PMDA and plan to complete additional preparations for initiation of a clinical study in Japan for stroke, with commencement of the study expected in the second half of 2016. Stroke represents an area where the clinical need is particularly significant, since it represents a leading cause of death and significantly lowers quality of life for many stroke victims. Currently, there are more than 15 million people that suffer a stroke globally and more than two million stroke victims each year in the United States, Europe and Japan, combined. Ischemic strokes, which represent the most common form of stroke, are caused by a blockage of blood flow in the brain that cuts off the supply of oxygen and nutrients and can result in tissue loss and neurological damage, as well as long-term or permanent disability.

Unfortunately, current therapeutic options for ischemic stroke victims are limited, since the only available therapies, administration of the clot dissolving agent tPA, or 'thrombolytic,' or surgical intervention using mechanical reperfusion to remove the clot, must be conducted within several hours of the occurrence of the stroke. As a consequence of this limited time window, only a small percentage of stroke victims are treated with the currently available therapy—most simply receive supportive or 'palliative' care. The long-term costs of stroke are substantial, with many patients requiring extended hospitalization, extended physical therapy or rehabilitation (for those patients that are capable of entering such programs), and many require long-term institutional or family care.

MultiStem cell therapy is a patented regenerative medicine product that has shown the ability to promote tissue repair and healing in a variety of ways, such as through the production of therapeutic factors produced in response to signals of inflammation and tissue damage.  MultiStem therapy's potential for multidimensional therapeutic impact distinguishes it from traditional biopharmaceutical therapies focused on a single mechanism of benefit. The product represents a unique "off-the-shelf" stem cell product that can be manufactured in a scalable manner, may be stored for years in frozen form, and is administered without tissue matching or the need for immune suppression. Based upon its efficacy profile, its novel mechanisms of action, and a favorable and consistent safety profile demonstrated in both preclinical and clinical settings, MultiStem therapy could provide a meaningful benefit to patients, including those suffering from serious diseases and conditions with unmet medical need.

Athersys has forged strategic partnerships and a broad network of collaborations to develop MultiStem cell therapy for a variety of indications, with an initial focus in the neurological, cardiovascular and inflammatory and immune disorder areas.