The SARS-CoV2 pandemic has ignited a massive effort across the globe, led by medical researchers and biotech companies, to come up with therapies that can help patients and bring an end to the pandemic. Vaccines, antibodies, immunity and convalescent plasma have all become common medical terms used in households across the country.

However, what we haven't heard much about in the main stream media may be one of the most promising therapies to get COVID-19 patients off a ventilator. That "below the radar" therapy is the use of allogeneic off-the-shelf stem cell therapies that have demonstrated an innate ability to modulate an out of control immune system that can wreak havoc upon the lungs of COVID-19 patients stricken with acute respiratory distress syndrome (ARDS).

COVID-19 patients who have been unfortunate to end up on ventilators as a result of ARDS have seen alarmingly high mortality rates. This study from the UK shows a mortality rate of 2/3 in a study of 1,053 ventilated patients. A safe therapy that can improve the mortality rate while the world awaits a vaccine would go a long way towards helping the United States reopen.

What is ARDS? The simple answer in layman's terms is severe damage to the lungs caused by a damaging overreaction of the immune system to a perceived threat. That threat can range from trauma to viruses to pneumonia. Here is a more scientific definition from a 2011 article on the topic:

The acute respiratory distress syndrome (ARDS) causes 40% mortality in approximately 200,000 critically ill patients annually in the United States. ARDS is caused by protein-rich pulmonary edema that causes severe hypoxemia and impaired carbon dioxide excretion. The clinical disorders associated with the development of ARDS include sepsis, pneumonia, aspiration of gastric contents, and major trauma. The lung injury is caused primarily by neutrophil-dependent and platelet-dependent damage to the endothelial and epithelial barriers of the lung. Resolution is delayed because of injury to the lung epithelial barrier, which prevents removal of alveolar edema fluid and deprives the lung of adequate quantities of surfactant. Lymphocytes may play a role in resolution of lung injury. Mortality has been markedly reduced with a lung-protective ventilatory strategy. However, there is no effective pharmacologic therapy, although cell-based therapy and other therapies currently being tested in clinical trials may provide novel treatments for ARDS.

Image Source: Imaging Technology News

This YouTube video provides an excellent, illustrative explanation of ARDS and the role of the inflammatory cascade in this condition for readers who want a better understanding of how and why COVID-19 has led to an estimated 257,000 deaths since the outbreak began.

Over the past decade, tangible albeit slow progress in the clinic for some stem cell therapies has been countered by high profile failures by others. Osiris Therapeutics (OSIR), Geron Corporation (GERN) and Cytori Therapeutics (currently known as Plus Therapeutics (PSTV)) have all flamed out and abandoned their stem cell dreams to change the world. At the same time the voracious need for capital, often funded through "at the money" equity issuance programs, has tempered the share prices of the remaining survivors in the sector and the occasional inevitable secondary offering has burnt many investors with sudden painful dilution and sharp share price drops. Only those who have followed this sector closely and understood the depth of the science had any reason for optimism.

However, the realization that stem cells may play a positive role in SARS-CoV2 pandemic has recently brought in a tremendous amount of new investor interest into the sector. More recent investors in the sector may not be aware of the evolution in understanding of how adult stem cells work. Over the last two decades, the initial incorrect hypothesis of direct regeneration by engraftment of adult stem cells had evolved into a clearer understanding that the immunomodulatory and trophic properties of these cells provide the meaningful benefit in diseases related to the immune system.

Recently, many anecdotal studies have demonstrated seemingly game changing results in studies using adult stem cells to treat COVID-19 patients. The term "game changer" has been used too often and prematurely during this pandemic but early uncontrolled stem cell data have been impressive.

The first stem cell related study came out of Wuhan, China on seven COVID-19 patients with COVID-19 pneumonia. Here is an abstract from the study (bold type added for emphasis):

A coronavirus (HCoV-19) has caused the novel coronavirus disease (COVID-19) outbreak in Wuhan, China. Preventing and reversing the cytokine storm may be the key to save the patients with severe COVID-19 pneumonia. Mesenchymal stem cells (MSCS) have been shown to possess a comprehensive powerful immunomodulatory function. This study aims to investigate whether MSC transplantation improves the outcome of 7 enrolled patients with COVID-19 pneumonia in Beijing YouAn Hospital, China, from Jan 23, 2020 to Feb 16, 2020. The clinical outcomes, as well as changes of inflammatory and immune function levels and adverse effects of 7 enrolled patients were assessed for 14 days after MSC injection. MSCs could cure or significantly improve the functional outcomes of seven patients without observed adverse effects. The pulmonary function and symptoms of these seven patients were significantly improved in 2 days after MSC transplantation. Among them, two common and one severe patient were recovered and discharged in 10 days after treatment. After treatment, the peripheral lymphocytes were increased, the C-reactive protein decreased, and the overactivated cytokine-secreting immune cells CXCR3+CD4+ T cells, CXCR3+CD8+ T cells, and CXCR3+ NK cells disappeared in 3-6 days. In addition, a group of CD14+CD11c+CD11b midregulatory DC cell population dramatically increased. Meanwhile, the level of TNF- was significantly decreased, while IL-10 increased in MSC treatment group compared to the placebo control group. Furthermore, the gene expression profile showed MSCs were ACE2-and TMPRSS2-which indicated MSCs are free from COVID-19 infection. Thus, the intravenous transplantation of MSCs was safe and effective for treatment in patients with COVID-19 pneumonia, especially for the patients in critically severe condition.

Source: Aging and Disease

This study opened the floodgates on FDA Expanded Access or "Compassionate Use" studies in the U.S. by stem cell companies who previously had no clinical programs in pneumonia or ARDS. Results from these early studies from Mesoblast (MESO), Pluristem (PSTI) and Capricor (CAPR) have lit the sector on fire and ignited a race to get these therapies into the clinic.

All proposed stem cell therapies for ARDS have one common trait, the mechanism of action. They all work by down-regulating the production of pro-inflammatory cytokines and increasing production of anti-inflammatory cytokines, while enabling the recruitment of naturally occurring anti-inflammatory cells to involved tissues. In other words, they have the innate ability to down regulate the bad guys and up regulate the good guys of the immune system in a battle to save a patient's life from self destruction. Another important trait of allogeneic stem cell therapies that make them so promising has been safety that has been demonstrated in multiple controlled clinical studies. Cells are cleared from the body after a short period of time.

The Roster: The Stem Cell Companies Pursuing COVID-19 Induced ARDS Therapies

Success in reducing the mortality rate of COVID-19 ARDS would not only be a boon to the entire global economy but to the investors who are fortunate enough to pick some of the winners. The only non-stem cell therapy to show any efficacy so far, Remdesivir, has shown only marginal effect and has yet to prove a statistically significant effect on mortality rates. Cutting the death rate is a key to reopening the economy and promise has been shown for stem cell therapies that have already made their way to clinical studies.

This article will focus on five stem cell related companies. What differentiates each of these companies currently in this race comes down to their respective cell types, cell source, manufacturing scalability and depth of both pre-clinical and clinical data and from a financial perspective, relative market caps. There are four companies that have already reported programs in COVID-19 induced ARDS. They are Athersys Inc. (ATHX), Capricor Therapeutics, Mesoblast Ltd. and Pluristem Therapeutics Inc. As of this writing, Capricor, Mesoblast and Pluristem have actually treated and provided data on COVID-19 patients under compassionate use programs. However, none of these three companies had any clinical ARDS data before the SARS-CoV2 pandemic began. A fifth, albeit obscure early stage company domiciled in Australia called Cynata Therapeutics Limited (OTC:CYYNF), recently released pre-clinical data for ARDS in 14 sheep and indicated that it is in discussions with leading key opinion leaders about a possible clinical trial including COVID-19 ARDS patients.

Results from these compassionate studies have looked very encouraging and based on these small uncontrolled patient results, share prices of stem cell stocks, in general, have skyrocketed in 2020. However, as we have learned the hard way from other experimental COVID-19 drugs such as hydroxychloroquine, only data from a well designed placebo controlled trial can prove efficacy and safety. This article will provide links to relevant data to give investors the information needed to begin to evaluate each company. I will also provide my own thoughts, primarily related to COVID-19 ARDS programs, for each of the five companies and where I have placed my bets. For this report, I will not focus on other lead indications but have listed them as a reference in the following table that provides a handy starting point and overview to compare the five companies:

Athersys had a large head start in ARDS going into the pandemic with its cell therapy called MultiStem. It had been working on a therapy for ARDS long before anyone heard about COVID-19 and has promising Phase II data. I refer investors to my two recent articles that discuss potential BARDA funding and an early warrant exercise by its largest shareholder, Healios KK.

March 18th - Athersys - Now In Play For COVID-19 - FDA Fast Tracked Therapy For ARDS

March 30th - Athersys Sees 4 Million Share Insider Buy From Partner Running COVID-19 ARDS Trial In Japan

A recent $7,040,000 insider buy from Healios is a positive signal considering that Healios is running its own an open label MultiStem ARDS in Japan. Nothing speaks louder than COLD, HARD CASH.

The science behind MultiStem for ARDS is deep and it is the only company with ANY Phase II data on the use of stem cells as a therapy for ARDS. MultiStem has a significant advantage, over more commonly used mesenchymal stem cells (MSCs), in that it is highly scalable and has the potential to obtain million doses from a single donor. Some question why Athersys uses relatively large doses in its clinical trials, like 1.2 billion for stroke. The answer, in my view, is because they can. Unlike other adult stem cells scalability is not an issue for MultiStem so the supply of cells is not an issue. The following chart from a published study in Frontiers in Immunology gives a nice side by side comparison of MAPC (MultiStem) vs. MSCs that includes comparative data on limitations of population doublings and other biomarker data:

Source: Frontiers in Immunology

To give readers a better understanding on why limitations on population doubling are critical to large scale allogeneic stem cell manufacturing, this table illustrates the concept:

Source: WST Research

On May 1st, Athersys announced the activation of its first enrollment sites for its Phase II/III clinical trial in COVID-19 induced ARDS. On May 4th it announced its first enrolled patients. The trial is estimated to enroll 400 patients with an open label lead-in cohort that should provide some early data and will help determine dosing in the later cohorts of the study. As mentioned, partner and majority shareholder, Healios KK is currently nearing the end of a 30 patient clinical trial in Japan for ARDS, using MultiStem, and has added a 5 patient COVID-19 induced ARDS arm to its existing trial. Positive data from this trial would be catalyst for Athersys shares and positive data are my expectation. Potential BARDA funding has been a catalyst in ATHX shares so far this year. However, the removal of the Director of BARDA, for alleged dubious reasons, is a concern and may have affected the timeline of Athersys BARDA funding. Most who follow Athersys closely had assumed that BARDA funding for the Athersys COVID-19 ARDS clinical trial would be announced by now yet it has not happened. Negotiations are ongoing and investors will get a shareholders update on May 7th. It is difficult to assess where these negotiations currently stand. Athersys recently raised $57,000,000 in a secondary offering and has a cash balance of approximately $80,000,000 so immediate cash concerns are mitigated.

Capricor came out of nowhere to enter the COVID-19 ARDS race. Its cells are called cardiosphere-derived cells (CDCs). Its lead Phase II therapy is in Duchenne Muscular Dystrophy for which it released promising 6 month data late last year. The therapy failed to outperform versus a placebo in a Phase I/II study designed to reducing scaring in heart attack patients in 2017 using autologous CDCs. These excerpts about these cells come from Capricor's website:

Our cell therapy technology is based on the innovative work of Eduardo Marbn, M.D., Ph.D., company Co-Founder and Scientific Advisory Board Chairman, and Director of the Cedars-Sinai Heart Institute. Dr. Marbn pioneered the isolation of stem cells from heart tissue, which provided the basis for Capricor's cardiosphere-derived cell (CDC) technology.

CAP-1002 consists of allogeneic cardiosphere-derived cells, or CDCs, a unique population of cells that have been shown to exert potent immunomodulatory activity, which alters the immune system's activity to stimulate cellular regeneration. CDCs have been the subject of over 100 peer-reviewed scientific publications and have been administered to approximately 140 human subjects across several clinical trials.

Capricor's connections to Cedars-Sinai Heart Institute gave it a natural opening to the Cedars-Sinai Medical Center where it ran its recent 6 patient compassionate use study in COVID-19 ARDS. Although the study was small, the results looked outstanding:

In the compassionate care cases, five male patients and one female patient (between ages 19 and 75) suffering from COVID-19 received IV infusions of 150 million allogeneic cardiosphere-derived cells (CAP-1002). Of the five patients on ventilator support, four patients no longer required ventilator support within just one to four days following the infusion. The fifth patient remains on mechanical ventilation and the sixth patient is receiving supplemental oxygen and is currently clinically stable. Additionally, laboratory biomarkers correlated with poor outcomes were measured in all patients. Following infusion, several patients showed improvements in biomarkers, such as ferritin, absolute lymphocyte counts and CRP. No adverse events related to the administration of CAP-1002 were observed. This data has been submitted for publication.

Evaluation of the scalability of CDCs was hard to determine. Finding relevant data was difficult and my inquiries to the company went unanswered. However, the source of these cells originates from donated adult heart tissue and is probably more difficult to obtain compared to bone marrow or placenta tissue although I have no firm data to support this. I suspect that scalability will be in the same range as natural MSC's from the table above.

As disclosed in its recent press release, Capricor revealed information on two potential short-term catalysts:

Following a review of the available data, the U.S. Food and Drug Administration (FDA) approved the Company's expanded access protocol to treat up to 20 additional COVID-19 patients. There is also a randomized, placebo-controlled trial planned to treat patients with moderate and severe disease which is intended to be funded by non-equity capital.

Capricor has a relatively small market cap of $85,000,000 and positive news from the additional 20 patient study and/or a non-equity funded randomized, placebo-controlled trial will surely lift shares.

Cynata is included in this article, primarily as a result of my interest in the scalability of their Cymerus Technology that I believe is overlooked by investors. The company trades on the Australian Stock Exchange under the symbol CYP and those are the shares I own. I have had discussions with the CEO of Cynata, Ross MacDonald, who has been very helpful in helping me understand the company and its unique technology. Their work in ARDS is limited to a pre-clinical study in sheep but they have successful PHASE I data in GvHD that has been partnered with FujiFilm in Japan. FujiFilm exercised the option on GvHD after seeing the results of the study. These data lead me to conclude that their engineered MSCs are equal to or superior to naturally occurring MSCs and the scalability advantage versus MSC's used by Mesoblast and PluriStem make them an acquisition target or partnering candidate with any good data from their larger peers. They too are also exploring opportunities in COVID-19 ARDS: "We are currently in discussions with leading key opinion leaders about a possible clinical trial in human patients with ARDS, including those who have developed ARDS as a result of the devastating COVID19 pandemic."

First observation about Mesoblast is that they know how to execute. They have been very successful in forming global partnerships, obtaining and enforcing intellectual property and have moved at rapid speed on COVID-19 ARDS. Before March 10th, they had no program on ARDS but they leveraged post-hoc data on Chronic Obstructive Pulmonary Disease Study to move at lightning speed that lead to the first announcement of a Phase II/III trial on COVID-19 induced ARDS:





The company has more than one cell type in its pipeline but is using an MSC therapy called RYONCIL (remestemcel-L) for COVID-19 ARDS. Many investors may not be aware that this MSC drug candidate was acquired from Osiris Therapeutics after it failed in an adult GvHD program that resulted in the abandonment of the stem cell business by Osiris. Speculation for the failure is that over expansion of MSCs during manufacturing for allogeneic human trials versus methods used in pre-clinical studies may have played a role. However, Mesoblast did present excellent data on a Phase III trial for pediatric GvHD and approval from the FDA is expected. A valid question to ask is why did remestemcel-L succeed pediatric GvHD yet fail in adults in the Osiris studies? Mesoblast was successful in gaining approval for GvHD in Japan through its licensee in Japan, JCR Pharmaceuticals Co. Ltd.

With regard to COVID-19 compassionate use data, Mesoblast results looked impressive:

Mesoblast today announced 83% survival in ventilator-dependent COVID-19 patients (10/12) with moderate/severe acute respiratory distress syndrome (ARDS) treated during the period March-April 2020 with two intravenous infusions of Mesoblast's allogeneic mesenchymal stem cell product candidate remestemcel-L within the first five days. 75% (9/12) have successfully come off ventilator support at a median of 10 days. At this time, seven have been discharged from the hospital. Patients received a variety of experimental agents prior to remestemcel-L. All patients were treated under an emergency Investigational New Drug (IND) application or expanded access protocol at New York City's Mt Sinai hospital. In contrast, only 9% (38/445) of ventilator-dependent COVID-19 patients at a major referral hospital network in New York City were able to come off ventilator support when treated with standard of care during March/April 2020. 1Moreover, there was 88% mortality with only 12% survival (38/320) among ventilator-dependent COVID-19 patients at a second major referral hospital network in New York City during the same period. 2These poor outcomes are consistent with earlier published data from China where mortality rates of over 80% were reported in patients with COVID-19 and moderate/severe ARDS 3.


1 Petrilli CM et al. Factors associated with hospitalization and critical illness among 4,103 patients with Covid-19 disease in New York City. MedRxiv 2020 doi:

2 Richardson S et al. Presenting characteristics, comorbidities, and outcomes among 5700 patients hospitalized with COVID-19 in the New York City area. JAMA 2020. doi:10.1001/jama.2020.6775

3 Liu Y et al. Clinical features and progression of acute respiratory distress syndrome in coronavirus disease 2019. Medrxiv 2020;

No one can criticize the progress that Mesoblast has made over the last few years and its expediency in going from nowhere in ARDS to starting a COVID-19 induced ARDS was remarkable. However, even before the advent of COVID-19, ARDS has been a large unmet medical need and the scalability of remestemcel-L per donor during manufacturing will need to be limited in order to provide cells that are viable. According to the American Thoracic Society, "Approximately 150,000-200,000 Americans will be diagnosed with ARDS each year. Worldwide, that number is approximately 2.2 million". COVID-19 has increased these numbers substantially. Scalability of manufacturing will become a more relevant issue for large indications such as ARDS, in comparison to a relatively small indication like GvHD with just 18,000 cases globally in 2018. This article provides an excellent background on MSCs as a therapy and specifically on remestemcel-L.

Like Mesoblast and Capricor, Pluristem also moved quickly by initiating compassionate use studies on COVID-19 patients. Pluristem uses MSC like cells derived from donated placentas. The company describes its cells as follows:

PLacental eXpanded (PLX) cells are placenta-derived, mesenchymal-like adherent stromal cells that are designed to be administered to patients without the need for tissue or genetic matching. These cells release soluble biomolecules, such as cytokines, chemokines and growth factors, which act in a paracrine or endocrine manner to facilitate healing of damaged tissue by stimulating the body's own regenerative mechanisms.

Pluristem's leading indications are in Critical Limb Ischemia (CLI) and Muscle regeneration following hip fracture surgery which are both in global Phase III clinical trials. Aside from moving quickly on COVID-19 ARDS, with no prior data in the area, Pluristem has been incredibly successful in raising a substantial amount of capital in a short period of time. Their COVID-19 timeline looks like this:

March 12th - Pluristem and Charit University of Medicine Berlin Join Forces Targeting Potential Treatment for Respiratory and Inflammatory Intratissue Complications Caused by COVID-19

March 17th - Israeli Ministry of Health Clears a Path to Allow Per Patient Compassionate Use Treatment of Covid-19 Patients with Pluristem's PLX Cells

March 30th - Pluristem Treated First Three COVID-19 Patients in Israel under Compassionate Use

April 7th - Pluristem Reports Preliminary Data from its COVID-19 Compassionate Use Program, Treating Seven Patients with Acute Respiratory Failure

April 13th - Pluristem Expands its Compassionate Use Program: Treated First COVID-19 Patient in U.S. Under FDA Single Patient Expanded Access Program

April 30th - EIB signs collaboration with Israel Innovation Authority and 50 million financing agreement with Pluristem to develop therapies for COVID-19 and other unmet medical needs

May 5th - Pluristem Announces Pricing of Its Registered Direct Offering for Aggregate Proceeds of $15 Million

It was an impressive couple of months for Pluristem, especially the $50,000,000 non-dilutive funding collaboration with the European Investment Bank. BARDA should take notice. Like Mesoblast and Capricor, Pluristem reported very promising results in a small compassionate use study:

Preliminary data following treatment with PLX cells Six of the seven patients have completed the seven day follow up period ("Group A"). The seventh patient has not yet completed seven day follow up.

While the treated patients are considered high risk for mortality (Pavan K. Bhatraju et al., the preliminary data demonstrated 100% survival rate as of today.

Four patients (66%) out of Group A demonstrated improvement in respiratory parameters. Three patients (50%) out of Group A are in advanced stages of weaning from ventilators. One patient has shown no change in respiratory parameters, is still breathing with the assistance of a ventilator and remains relatively stable.

One patient has shown deterioration in respiratory parameters.

Two patients (50%) out of four in Group A with multi-organ failure prior to treatment, showed clinical recovery in addition to the respiratory improvement.

With regard to scalability, Pluristem will need multiple donors to ensure it can meet demand for a big indication like ARDS. That means ensuring consistency among multiple doses and proving each batch is functionally equivalent to regulators. Based on this study, it seems that PLX cells are more expandable then Mesoblast MSC cells but this could not be confirmed with absolute certainty. Neither of these companies' cell types can compete with the cells of Athersys or Cynata when it comes to proliferation.

I wrote my first article in the stem cell space for Seeking Alpha in 2011 and much evolved over the ensuing years. Autologous stem cells derived from fat, once the leading therapy of Cytori Therapeutics went nowhere and the stock went by way of the Titanic. Geron, a pioneer in embryonic stem cell therapies and an early high flier, finally gave up on the idea after hundreds of millions squandered. The five companies mentioned above are still in the race. They all offer some version of allogeneic adult stem cells that work primarily through immunomodulatory and trophic mechanisms of action simply because that is where the science has led. Seemingly overnight, the race for a stem cell treatment for COVID-19 ARDS has became a frantic and competitive contest simply due to the wealth of solid evidence that a blockbuster stem cell therapy will emerge that can demonstrate a statistically significant improvement on the mortality rate of an epic pandemic.

I have provided a wealth of information for investors to learn and conduct their own due diligence. Yet, in all honesty, I have barely scratched the surface on the depth of the science, innumerable experiments and analyses that brought the industry to this point and we are not there yet. Through the links provided readers can learn details about specific biomarkers, methods of culturing stem cells, induced pluripotent stem cells, trial designs, paracrine signaling and more. It's fascinating stuff.

As far as where I put my money? My biggest position is Athersys. They have been studying this for years and it looks like they are finally at the doorstep of success with a very scalable cell therapy. How often does one see a $7,040,000 insider buy from an independent partner running its own open label clinical trial using the same exact therapy for the same indication the company it is investing in? A BARDA deal would be a tremendous validation of their work in ARDS but, if not, a proven therapy to help save the world from the biggest health calamity of our lifetimes will also do.

I also like Capricor as a catalyst driven investment over the next month. Its small market cap gives it plenty of upside as investors await results from their FDA approved expanded access protocol to treat up to 20 additional COVID-19 patients in California. If these results are consistent with results of the first 6 patients, I expect the shares to move up sharply and the pressure could build for some kind of emergency access program. While I still have concerns about scalability of their cells but in the short term it won't matter that much.

Finally, I own Cynata Therapeutics, from down under. It has a cutting edge technology from that originated from the University of Wisconsin-Madison, a world-renowned leader in stem cell research. This is the next generation of MSC manufacturing that eliminates many of the issues associated with multiple batch manufacturing that is critical for larger indications such as ARDS.

To those investors who prefer Mesoblast and Pluristem, they may be winners too but we all have to place our bets on where we see the best probabilities of risk versus reward.

Disclosure: I am/we are long ATHX,CAPR,CYYNF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: These are the personal views of Wall Street Titan Research and should not be relied upon for your investment decisions. All investors should always do their own due diligence.

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5 Stem Cell Companies Racing Towards COVID-19 ARDS Therapy - Seeking Alpha

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