Shares of Athersys (ATHX) are down sharply by about 50% today after the company announced results for its phase 2 trial using multistem cell therapy to treat patients with Ishemic stroke. The company announced that it had failed to meet both the primary and secondary endpoints of the study. The trial compared the company's Multistem cell therapy  to a placebo compound. The mulistem cell therapy failed to show a significance when compared to the placebo compound of the study at a 90 day time point. 

Athersys did state that there were some benefits for using Multistem over a placebo. One benefit observed was lower mortality rates and life threatening adverse events. Some benefits were even seen in lowering infections and pulmonary events. But these findings along with the safety data still doen't change the fact that Multistem trial failed to meet both the primary endpoints and secondary endpoints, which related to recovery from stroke. 

The trial enrolled approximately 126 patients who either took high doses of Multistem or placebo. The primary endpoint of the study looked for safety and global stroke recovery at day 90. Athersys' Multistem failed in this regard for global stroke recovery at day 90. In addition the secondary endpoints were looking for recovery and dysfunction including biomarkers associated with subject condition and recovery.  Multistem failed the secondary endpoint as well. 

For the time being the company does have other clinical programs, in acute-myocardial infraction -- AMI -- and acute respiratory distress syndrome -- ARDS. The AMI program has only completed a phase 1 trial and now needs to run a large phase 2 trial. With respect to the ARDS program it has only achieved non-clinical results and the company needs to initiate a phase 1 trial for patients in the clinic.

Before this trial failure Athersys, with partner Pfizer (PFE), ran a phase 2 trial in patients with Ulcerative Colitis using Multistem cell therapy compared to a placebo as well. This phase 2 trial also failed, because it failed to show a statistically significant reduction in severity of the disease along with lower rectal bleeding as compared to a placebo compound over an 8-week period. We think investors should avoid investing in this company as a long term play but probably could look at it in terms of a day trade. But still investors should be cautious trading this based off today's failed results.