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Athersys, Inc. Overview 2016 Stifel Healthcare Conference Gil Van Bokkelen - Chairman & CEO Presented by: Rob Perry VP, Head of NASDAQ: Product Supply and ATHX Operations www.Athersys.com November 16th, 2016 Forward Looking Statements The statements and discussions contained in this presentation that are not historical facts constitute forward-looking statements, which can be identified by the use of forwardlooking words such as “believes,” “expects,” “may,” “intends,” “anticipates,” “plans,” The statements and discussions contained in this presentation that are not historical facts constitute “estimates” and analogous or similar expressions intended to identify forward-looking forward-looking statements, which can be identified by the use of forward-looking words such as statements. These forward-looking statements and estimates as to performance, “believes,” “expects,” “may,” “intends,” “anticipates,” “plans,” “estimates” andfuture analogous or similar estimates as to future valuations and other statements contained herein regarding expressions intended to identify forward-looking statements. These forward-looking statements and matters that are not historical facts, are only predictions, and that actual events or results estimates as to future performance, estimates as to future valuations and other statements contained may differ materially. or guarantee youpredictions, that any future results herein regarding mattersWe thatcannot are notassure historical facts, are only and that actualdescribed events or results differ materially. Weachieved, cannot assure guarantee youcould that any future results described in in this may presentation will be and or actual results vary materially from those this presentation willforward-looking be achieved, and statements. actual results could vary materially from those reflected in such reflected in such forward-looking statements. Information contained in this presentation has been compiled from sources believed to be Information contained in this presentation has been compiled from sources believed to be credible and credible and reliable. However, we cannot guarantee such credibility and reliability. The reliable. However, we cannot guarantee such credibility and reliability. The forecasts and projections of forecasts and projections of events contained hereinanalyses are based upon opinions. subjective events contained herein are based upon subjective valuations, and personal valuations, analyses and personal opinions. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities. This shall notifconstitute an offer to sell or thetosolicitation of an offer toand buy Suchpresentation an offer or solicitation, made, will only be made pursuant an offering memorandum subscription documents. any securities. Such an offerdefinitive or solicitation, if made, will only be made pursuant to an offering memorandum and definitive subscription documents. Athersys: Brief Overview & Highlights Public company in U.S. since 2007 (NASDAQ:ATHX) Committed to developing novel and “best in class” therapies that address substantial unmet medical needs Primary focus: Practical & Scalable Regenerative Medicine ‒ MultiStem®: A novel & proprietary cell therapy formulated for “off-the-shelf” use (e.g. pharmacy freezer to IV bag to patient) ‒ Biologic with multiple mechanisms of action ‒ Currently: 6 clinical stage programs & broad preclinical pipeline ‒ Highly scalable Essential to successful commercialization ‒ Broad IP estate (>130 patents) Therapeutic areas of concentration ‒ Neurologic ‒ Cardiovascular ‒ Inflammatory & Immune ‒ Other programs 3 Product Profile MULTISTEM® CELL THERAPY Based on Proprietary MAPC Technology Promotes Healing and Tissue Repair Administered Systemically or Locally Long Storage Life and High Production Yield Off the shelf administration with no tissue matching or immune suppression required Works through multiple mechanisms of action Intravenous, catheter, injection, matrix/implant > 7 years of stability data, and millions of doses from each donor 4 Practical: Simple to Prepare & Easy to Administer Hospital Pharmacy to Patient in < 1 hour 5 Highly Scalable: A Competitive Advantage Distinctive and Robust Expansion Profile + Integration with Advanced Bioreactor Technology Enables Unprecedented Commercial Scale Traditional 2D Culture 3D Bioreactors Commercial Scale Bioreactors 6 Enhancing Healing Through Multiple Mechanisms Shifting the Balance in Repair Processes Immunomodulation Inflammation Reduction Angio/Vasculogenesis MultiStem expresses multiple therapeutic proteins & factors that limit tissue damage, promote repair & enhance healing Neuroprotective / Cytoprotective 7 Development Status of Key MultiStem Programs (Consistent Safety Data Accelerates Broader Development Options) Neurological Preclinical Phase I Phase II Recent Data Recent Data Multiple Sclerosis BLA Study Complete - One year results presented at ISC 2016 and Stroke 2016 Japan CTN Accepted by PMDA SPA Granted by FDA Ischemic Stroke* Traumatic Brain Injury Phase III Recent Data Spinal Cord Injury Cardiovascular Phase 2 Underway NHLBI Clinical Grant Award to Support Trial Site & patient recruitment ongoing Acute Myocardial Infarction PVD/PAD/CLI Congestive Heart Failure Inflammatory & Immune Inflammatory Bowel Disease HSC Transplant / GVHD Orphan Status Granted Solid Organ Transplant Trial active in Germany Pulmonary (ARDS) * In partnership with Registrational Trial authorized by FDA under SPA, EMA (Orphan Designation in U.S., E.U.) Trial Underway (UK & US) in Japan Currently 6 Clinical Programs (4 in/at mid-late stage Clinical Development) 8 Treating Neurological Injury & Disease w/ MultiStem IV Administration to Promote & Accelerate Healing & Repair Work conducted in multiple preclinical models Ischemic Stroke Supported by StrokeMAP Traumatic Brain Injury (TBI) Supported by NIH Acute Neurological Injury Neonatal Hypoxic Ischemia Supported by NIH Spinal Cord Injury Supported by Third Frontier Multiple Sclerosis Supported by Fast Forward, MS Society Parkinson’s Disease Supported by Michael J. Fox Foundation Also: Orphan status granted by FDA for MPS-1 (Hurler’s Syndrome) 9 Opportunity for Cell Therapy in Ischemic Stroke Ischemic stroke represents a major unmet need – and a high priority for healthcare systems in U.S., EU and Japan and other regions Leading cause of serious disability and third leading cause of mortality globally Ischemic Stroke Example: Damaged area Clot or plaque Annually ~800,000 first time stroke victims in U.S., >2.2 Million (U.S. + EU + Japan), and 16.9 M globally Tremendous unmet need: tPA must be administered within 3 – 4.5 hours of ischemic stroke & thrombectomy within 6 hrs (combined, currently used on <10% of ischemic stroke patients) With an expanding aging population globally (and increasing obesity in U.S.), the clinical need and commercial opportunity are expected to increase dramatically in years ahead 10 Intravenous MultiStem for Stroke: How it works Ischemic Stroke MultiStem works through regulation of multiple factors and pathways important to brain recovery following stroke (i.e. downregulates neuroinflammation & upregulates repair) (1) Following a stroke a hyperinflammatory response is initiated resulting in exacerbation of tissue loss & scarring in brain (preventing recovery) – much of this response emanates from the spleen (a key immune organ) (2) Intravenous administration of MultiStem (3) Cells migrate to spleen and peripheral immune system, and to lesser extent, the brain and other locations (4) Simultaneous downregulation of inflammatory cascade and upregulation of reparative immune response & other repair mechanisms 11 Following a stroke major inflammatory damage in the brain occurs (originating from the spleen) In preclinical models of ischemic stroke, removing the spleen before a surgically induced stroke significantly reduces the hyperinflammatory damage that occurs in the brain - but creates permanent immunological impairment. Fluoro-Jade Stain Major loss of brain tissue following MCAO stroke Significantly less brain damage occurs when spleen is removed prior to stroke Nissl Stain Note: MCAO = Middle Cerebral Artery Occlusion (i.e. ischemic stroke) Ajmo et al., (2008). J Neurosci Research 86: 2227-2234. 12 Intravenous MultiStem Mediates Dynamic Factor / Pathway Regulation in Preclinical Stroke Models Expression Profile - Brain (3 Days Post Stroke) Following IV MultiStem administration: Key Factors & Pathways Upregulated • • • • • Neuron projection development Neuron differentiation Neurogenesis Nervous system development Cell projection organization Key Factors & Pathways Downregulated Stroke – MultiStem #6 Sham Injured #3 Stroke – MultiStem #5 Sham Injured #2 Stroke – MultiStem #4 Sham Injured #1 Stroke – MultiStem #3 Stroke – MultiStem #2 Stroke – MultiStem #1 Stroke – Veh. #3 Stroke – Veh. #2 Stroke – Veh. #1 • • • • • • • • • Inflammatory response T cell activation Immune response Lymphocyte activation Acute inflammatory response Leukocyte activation Response to wounding Cell activation Myeloid leukocyte differentiation 13 MultiStem Stroke Clinical Trial Results from MASTERS-1 MultiStem Administration for Stroke Treatment and Enhanced Recovery Study 14 Study Sites Participating in B01-02 Trial Glasgow (2) Newcastle (1) Stoke (1) London (2) 33 Leading international stroke treatment centers across the U.S. and U.K. 15 Summary Interim Safety Results Favorable tolerability and safety profile through evaluation date, evaluated through at least 90 days for all patients – No infusional or allergic reactions, and no abnormal patterns in safety labs or vital signs – Adverse events consistent with expectations and experience for stroke patients of this type Lower mortality observed for MultiStem-treated vs Placebo treated patients ‒ Through day 30 assessment = 4 deaths for placebo group vs. 1 death for MultiStem group ‒ Total cumulative = 9 deaths for placebo group vs. 4 deaths for MultiStem group Lower rate of life threatening adverse events and death Lower rates of pulmonary events and infections among MultiStem treated patients vs. placebo treated patients 16 Key Midstream Modifications to B01-02 Protocol In accordance with the original B01-02 study protocol, patients were initially treated 24 – 36 hours post stroke – First 24 hours post stroke used to identify and exclude patients experiencing meaningful spontaneous recovery (e.g. due to a TIA or small focal stroke) or treatment related improvement – Trial focus was on patients with significant and durable deficits Consistent with the longstanding clinical maxim that “time is brain”, preclinical data showed that earlier intervention is more effective than later intervention (i.e. treatment at one day post stroke is more effective than two days, several days or a week post stroke) However…limited hours of operations at Bone Marrow transplant cell processing centers (typically open M – F from 8:00 AM – 4:00 PM) meant we were missing a huge proportion of patients eligible for the trial To overcome this, we extended treatment window from 36 hours to 48 hours post stroke Note: This will not be a limitation for future studies November 28, 2016 17 Summary Interim Efficacy Results (All subjects) For all subjects, initial review suggested no statistically significant difference in primary endpoint (Global Statistic) or key secondary endpoints However…promising signs of benefit in multiple clinically relevant indicators, including higher proportion of MultiStem treated patients achieving Excellent Outcome or Excellent/Good Recovery at day 90 (i.e. requiring improvement in all three clinical rating scales) ‒ Excellent Outcome: MultiStem = 15.4% vs placebo = 6.6% ∆8.8% ‒ Excellent or Good Recovery: MultiStem = 30.8% vs placebo 24.6% ∆6.2% ‒ Excellent neurological outcome: MultiStem = 38.5% vs Placebo = 29.5% ∆9.0% ‒ Shorter hospitalization: MultiStem = 7.9 days vs placebo 9.8 days ∆(18.6%) ‒ Evidence of faster recovery in MultiStem treated patients Significantly reduced rates of circulating immune cells (CD3+ T cells) at day 2 post treatment in MultiStem vs. placebo-treated patients (p = 0.001) – consistent w/ key aspect of therapeutic hypothesis 18 Evidence of Accelerated Patient Recovery Following MultiStem Treatment MultiStem Placebo MS≤36 vs All Placebo MS≤36 vs Placebo* Proportion with mRS<=2 Proportion w/ improved NIHSS ∆≥75% Proportion with Barthel Index ≥95 *Excludes patients receiving tPA and Mechanical Reperfusion 19 Earlier Administration of MultiStem Associated with Reduced Acute Hospitalization & ICU Time Hospitalization and Time in Intensive Care Unit (ICU) was substantially reduced among patients receiving earlier treatment with MultiStem (i.e. <36 hours) Clinical Metric MultiStem ≤36h n = 27 * Placebo n = 52 * Difference (per patient) % Reduction (p value) Duration of hospitalization (days) 6.7 10.3 3.6 days -35.0% (p = 0.009) Duration of ICU (days) 3.0 4.8 1.8 days -37.5% (p = 0.09) * As specified in original trial design, analysis includes patients that received either no reperfusion therapy, non-responder tPA or mechanical reperfusion (MR) patients in addition to investigational product (i.e. excludes limited number of subjects receiving both tPA and MR) 20 Final B01-02 Trial Results: Early Treatment w/ MultiStem Shows Significant Benefit at One Year Proportion of Subjects Achieving Excellent Outcome Increases Over Time (Patients Achieving NIHSS 0 or 1 and mRS 0 or 1, and Barthel Index >95) Day 90 ITT (All Subjects) MultiStem (n=65) Placebo (n=61) 15.4% vs. 6.6% Early MultiStem Treatment (<36 Hrs) vs All Placebo MultiStem (n=31) Placebo (n=61) 16.1% vs. 6.6% Early MultiStem Treatment (<36 hrs) vs Placebo* MultiStem (n=27) Placebo (n=52) 18.5% vs. 3.8% ∆ at Day 90 Day 365 ∆ at Day 365 8.8% 23.1% vs. 8.2% 14.9% p = 0.02 9.5% 29.0% vs. 8.2% 20.8% p < 0.01 14.7% 29.6% vs. 5.8% 23.8% p < 0.01 * As specified in original trial design, analysis includes patients that received either no reperfusion therapy, non-responder tPA or mechanical reperfusion (MR) patients in addition to investigational product (i.e. excludes a limited number of subjects receiving both tPA and MR) 21 Significantly Extending the Window to Treat Stroke Patients 0 Tissue Plasminogen Activator (tPA) Mechanical Thrombectomy Time (in hours) to Give Stroke Treatment 3 to 4.5 hours 6 hours 36 Relevant to ≤ 10% Stroke patients 36 hours MultiStem® Therapy Relevant to potentially 90-95% of stroke patients 22 Additional Clinical Observations from the B01-02 Stroke Study Among the most severely disabled stroke patients, a substantial reduction observed in serious and life threatening adverse events Severe Stroke (NIHSS 15+) Subjects % Subjects with Grade 3-5 Adverse Events Through Day 30 Events MultiStem n=26 4% Placebo n=23 In the aftermath of a severe stroke, patients are highly susceptible to a range of severe and potentially life threatening complications • Incr. WBCs • • • • • 43% 0% 10% 20% 30% 40% Acute Resp. Fail. Sepsis Acute Renal Fail. Edema Herniation 50% 23 Confirmatory Biomarker Data: Administration of MultiStem Results in Profound Reduction in Inflammatory Cascade Intent-to-Treat Population Difference in Fold Change at Day 7 Cytokine Day 7, p-value IL-1β 0.01 TNFα 0.03 IL-6 0.01 IL-12 0.12 INFγ 0.03 IL-2 0.11 Note: Evaluating available data from ITT population; controlling for differences in baseline values, and missing values Aggregate Fold Change from Baseline Through Day 30 ** * p<0.01 ≥1 day poststroke 24 Summary of Phase 2 Stroke Trial Results Administration of IV MultiStem is safe and well tolerated in patients that have suffered ischemic stroke ‒ Encouraging and consistent signs of efficacy in multiple parameters Similar to early tPA trials and other studies, evidence that early administration provides a robust therapeutic benefit ‒ Potential to meaningfully extend the clinical treatment window up to ~36 hours (vs current window of 3 – 4.5 hours for tPA, 6 hours for Mechanical reperfusion) ‒ Supported by preclinical studies suggesting earlier administration more effective than later administration (within range of 1 to 2 days) ‒ Consistent with benefit of early intervention using other forms of treatment When evaluating all trial subjects statistically significant benefit observed at one year for Excellent Outcomes in MultiStem treated patients vs subjects receiving placebo ‒ Outstanding improvements also seen in key parameters of independent living (e.g. excellent Barthel Index outcomes) ‒ Rates of improvement even higher among patients receiving treatment with MultiStem within 36 hours Biomarker analysis provides direct mechanistic support (e.g. impact on circulating immune cells, inflammatory cytokines) Current focus is on initiating next phase of clinical development in Japan and in North America and European Union 25 Overview of Stroke in Japan Stroke represents a huge healthcare challenge in Japan Stroke is the most prevalent cardiovascular disease in Japan Leading cause of serious disability o Current annual incidence of first time ischemic strokes in Japan is ~250k - 340k cases per year (Govt estimates, Datamonitor) o Most susceptible segment of population is increasing in size due to major demographic shift: Population cohort over age 65 will double over ~20 years o Population cohort over age 80 will increase from 6% of population to more than 14% Successful engagement related to advancing MultiStem stroke clinical program in Japan o PMDA has accepted CTN for confirmatory trial (September, 2016) o High degree of clinical investigator enthusiasm Once approved: Efficient reimbursement pathway o Highly centralized process, defined & efficient path o Applies universally to all payer groups in Japan 26 Traditional Approach New Framework 27 Regenerative Medicine Alliance HEALIOS K.K. Overview ‒ An emerging leader in regenerative medicine in Japan ‒ Experienced and accomplished leadership team (with proven product development experience) ‒ Robust pipeline (and one commercial product) ‒ Solid network of institutional partners and collaborators ‒ Public company with strong balance sheet (Tokyo Stock Exchange: 4593) 28 Initial Phase Alliance Structure & Key Terms ‒ Healios obtains: o Exclusive license to MultiStem for ischemic stroke in Japan (ATHX will supply manufactured product) o Rights to utilize MAPC technology in organ bud area for liver transplantation and other organ bud related research activities ‒ Athersys receives: o $15 million license fee o Ability to earn $30 million in development and approval milestones o Potential to earn additional $185 million upon successful achievement of substantial sales milestones o Double digit royalties that escalate with sales levels Expansion Phase ‒ Healios option to expand MultiStem license to include 2 additional indications in Japan (following data from ARDS study) and expanded license to MAPC for organ bud field ‒ Athersys to receive $10 million upon option exercise + potential for additional milestones, royalties 29 Clinical Development Program for Stroke • Cortical • Moderate to Severe • Treated within 36 hours Japan Study CTN Accepted by PMDA 2016-2018 North America / EU Study SPA Granted by FDA Approximately 30-40% of ischemic strokes Pursue accelerated approval pathways (e.g., Japan), and other regulatory designations where appropriate (e.g. SPA = Special Protocol Assessment) Expand Clinical & Commercial Scope 2018 Confirmatory / Pivotal study(ies) Indication Expansion: severity; noncortical; treatment window; dosing Other acute neurological indications 30 Significance of Special Protocol Assessment (SPA) Represents a Major De-risking Event – SPA = Written agreement between FDA and sponsor specifying precise criteria for approval – Establishes a clear, efficient path to success - no uncertainty about acceptability to FDA (Primary endpoint, key secondary endpoints, operational and statistical approach clearly specified and agreed to) Key Elements of Trial ‒ 300 patient study to be conducted in the U.S., EU (and UK), Canada ‒ Administration within 18 – 36 hours, straightforward two arm trial (1:1) ‒ Uses established regulatory benchmarks (Primary = mRS shift at 90 days, Key secondary endpoints = Excellent Outcome at 90 days, one year) Provides clarity for investors, potential partners ‒ Success in this pivotal study provides potential basis for approval ‒ Historically two very large pivotal studies would typically be required (e.g. where significant safety issues may exist and/or modest efficacy signal) 31 Cardiovascular Disease 32 Projected Increase in Costs Due to Cardiovascular Disease (2010 – 2030 U.S. Only) Note: Annual incidence of acute myocardial infarction in Japan = 162,000 cases per year (Datamonitor) Rising to >200,000 by 2027 33 MultiStem®: Acute Myocardial Infarction Administration of MultiStem following a heart attack Opportunity to improve outcomes & reduce risk of progression to CHF Blockage causing ischemia Angioplasty to clear blockage Delivery of MultiStem Rapid, efficient delivery of cells to ischemic area Retention of cells in relevant region of heart Multiple mechanisms of action, safe & well tolerated 5 sec 30 sec 60 sec Imaging data obtained from first patient enrolled in Phase 1 clinical trial – treated at Cleveland Clinic Vessel patency 34 Highlights from AMI (STEMI) Clinical Trial at One Year Results: Excellent safety profile observed through one year in Phase 1 trial (open label) Efficacy: Meaningful improvements seen in LVEF, stroke volume, wall motion Note: $2.8 Million in funding provided from NIH to support Phase 2 NSTEMI Trial Stroke Volume Ejection Fraction 40 * 30 4 month 12 month * * ∆LVSV 20 10 0 -10 -20 * Statistically significant improvement over baseline p = <0.05 Reg 20M 50M 100M * Statistically significant improvement over Registry group p = <0.01 Evaluation of pre-specified target patient population (baseline LVEF of >30 – <45 at time of MultiStem administration) See published Results from Phase 1 Clinical Study (Circ Research Jan. 2012, Penn et al) 35 Phase 2 Clinical Trial in Acute Myocardial Infarction Patient recruitment ongoing – Initial focus is on key sites in the United States – Also evaluating potential international sites Trial is focused on most common type of myocardial infarction (NSTEMI) – STEMI incidence has been declining in recent years – NSTEMI incidence has been relatively stable, but expected to increase further with aging demographics and other factors (i.e. increased rates of obesity, diabetes) – NSTEMI results in higher short term mortality (e.g. 30 day) and 1 year mortality (~25% mortality at one year) compared to STEMI (~12% mortality at one year) Clinical assessment – Primary efficacy: myocardial perfusion as determined by MRI at 4 months – Also evaluating MACE and QOL assessment (e.g. EQ5D) – Evaluating improvement in multiple cardiovascular performance parameters (including LVEF, LV dimensions) 36 Pulmonary Disease 37 Opportunity in Pulmonary Medicine Acute Respiratory Distress Syndrome (ARDS) afflicts >200,000 individuals in North America, >275,000 in EU and >70,000 people in Japan annually – ARDS represents a major area of unmet medical need, with a high rate of mortality and high level of morbidity, and typically requires extended intensive care hospitalization (e.g. ICU) – Very high cost of care and QOL impact Another multibillion $ market opportunity Athersys and collaborators have evaluated potential of MultiStem in pulmonary area Exploratory clinical trial has been initiated £2 Million in funding obtained for clinical development in U.K. (w/ additional funding from NIH) MultiStem conveys multiple mechanisms relevant to acute pulmonary inflammatory damage – Product naturally distributes to pulmonary system – Downregulation of acute inflammatory pathways – Upregulation of reparative cell types and pathways Clinical assessment – Evaluating functional improvements as well as impact on morbidity and mortality – Also evaluating QOL and other parameters 38 MultiStem reduces inflammation in human lungs with ischemic reperfusion injury 39 Key Milestones Partnering activities ‒ Development partnership in Japan for stroke (and potentially other indications) (Completed) ‒ Actively exploring other potential partnering opportunities Advancing Key Clinical Programs ‒ Japan Stroke Clinical Program o Obtain PMDA Regulatory Authorization (Completed) o Initiation of enrollment o Completion of enrollment o Top Line Results Seek Accelerated Approval Upon Positive Results ‒ North America + European Union Stroke Clinical program o End of Phase 2 meeting (Completed) o Finalize U.S. + E.U. trial study design and obtain authorization for international Phase 3 trial SPA defines a highly efficient path to potential approval (FDA: SPA Completed – EMA in process) o Initiate study ‒ Complete enrollment of ongoing AMI, ARDS clinical trials Continuing advancement toward “Commercial Readiness” 40 Summary Financial Data $ Thousands Nine Months ended September 30, 2016 Revenues $ 16,364 Operating expenses, net of insurance gain* (23,147) Expense from change in fair value of warrants and other income, net (1,427) Net loss $ (8,210) Net cash used in operating activities $ (4,647) Net cash provided by financing activities (includes equity purchase agreement issuances and warrant/option exercises) Cash and Investments $ 2,130 $ 19,379 *Insurance proceeds related to storm damage resulted in $682k gain; repairs completed Q3 41 Athersys, Inc. Overview 2016 Stifel Healthcare Conference Gil Van Bokkelen - Chairman & CEO Presented by: Rob Perry VP, Head of NASDAQ: Product Supply and ATHX Operations www.Athersys.com November 16th, 2016