In latest setback for stem cell sector, Celyad fails PhIII— and the biotech claims a victory

At first glance, the idea that stem cells can be used to strengthen a damaged heart has a potent attraction. It sounds sensible enough in the panoply of regenerative medicine. But Celyad’s program to prove that it has the right approach with Cure-C just failed in Phase III, offering a new setback to a troubled field and a body blow to the biotech company.

For Celyad’s ($CYAD) part, the fact that the Phase III failed was dispensed with quickly so the company could immediately move on to its analytical breakdown, pointing to a significant subpopulation of patients the company insists were helped by C-Cure. That analysis is giving them grounds to approach the EMA on filing the drug while flagging their eagerness to do a deal on the project, looking for another company to fund development and back a commercialization move.

That will be a hard argument to make with investors. Heart disease in specific – which affects millions of people – is one of the most demanding fields in R&D, with a very high bar for proving efficacy and safety to regulators. And investors initial response was to flee, sending Celyad’s shares down about 40% this morning.

When you want to dress up a Phase III failure, the first thing you point to is a “positive trend” across the patients treated. Celyad didn’t miss that point. Investigators then zeroed in on a group of patients “categorized by their End Diastolic Volume (EDV) at inclusion, significance was met for the primary endpoint (p = 0.015). Most importantly, in this subgroup, a strong trend or a statistical significant positive difference was seen in all individual elements of the composite primary endpoint (Mortality, Worsening Heart Failure Events, Quality of Life, 6 minutes Walking Test, End Systolic Volume and Ejection Fraction).”

There was no breakdown on which theoretical endpoints were hit by the subpopulation.

Phase III studies, though, aren’t designed to identify patient populations. They’re intended to provide conclusive evidence that a treatment is either effective or safe, or it isn’t.

The Phase III failure follows a decision by Teva just days ago to withdraw from its stem cell pact with Mesoblast, which badly damaged the biotech’s share price. And days before that BioCardia was forced to pull its $50 million IPO – designed to back its own late-stage stem cell treatment for heart disease – after it failed to gain enough support for the move.

Celyad – which changed its name in an effort to highlight a new focus on the trendy CAR-T field – suspended trading for its shares until after a morning press conference.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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