Athersys Provides MultiStem Clinical Update

Enrollment completed in second cohort of MATRICS-1 trial in hemorrhagic trauma

Enrollment reaches halfway mark in MASTERS-2 trial in ischemic stroke

Athersys, Inc. (Nasdaq: ATHX), a regenerative medicine company developing MultiStem^® (invimestrocel) for critical care indications, today provided an update on ongoing clinical trials with MultiStem for the treatment of patients following hemorrhagic trauma (MATRICS-1) and for the treatment of ischemic stroke (MASTERS-2). MultiStem is a proprietary off-the-shelf stem cell product in late-stage clinical trials for acute ischemic stroke, as well as trauma and other inflammatory conditions.

MATRICS-1 is an investigator-initiated Phase 1/2 randomized, double-blind, placebo-controlled trial evaluating MultiStem in patients following resuscitation from hemorrhagic trauma that is underway at the University of Texas-Houston and the Memorial Hermann Hospital, the busiest Level 1 Trauma Center in the U.S. Athersys announces that complete enrollment has been reached in the second cohort in which patients were dosed with MultiStem cells manufactured under Athersys’ new 3D manufacturing process. This will provide Athersys with safety data for 3D-treated patients and comparability against 2D-treated patients in the first cohort. This trial aims to enroll 156 patients in total, and enrollment in the third and final cohort is expected to begin later in 2023. This trial is being supported in part by MTEC (Medical Technology Enterprise Consortium) in partnership with the Department of Defense.

MASTERS-2 is a company-sponsored Phase 3 randomized, double-blind, placebo-controlled trial evaluating MultiStem for the treatment of acute ischemic stroke. Athersys announces that more than half of the 300 expected patients have now been enrolled in this multinational, multicenter trial. The rate of patient enrollment significantly increased during 2022 due in part to the opening of new sites across more geographies. More sites are expected to be activated throughout 2023.

“We are pleased to report these enrollment updates as they demonstrate both increasing interest in MultiStem and improved execution by our team and our partners. We’ve been able to significantly accelerate patient enrollment in MASTERS-2 due to more effective site management, enhanced clinician confidence based on TREASURE results and the opening of more sites. Athersys’ enthusiasm about MultiStem for the treatment of ischemic stroke has been bolstered by results from completed clinical trials, and we look forward to providing updates on MASTERS-2 after we engage with regulatory authorities during the first quarter of 2023,” stated Dan Camardo, Chief Executive Officer of Athersys.

MultiStem cells deliver benefit through distinct mechanisms including reducing inflammatory damage, protecting at-risk tissue at the site of injury and upregulating reparative aspects of the local and systemic immune system in a more timely way. Data in multiple animal models of acute neurological injury led to the development of this hypothesis regarding the cell mediated mechanism of action and is supported by 2 human clinical trials evaluating the MultiStem cell product following acute ischemic stroke that leads to increased recovery benefit over time.

“Cell therapy is among the most promising treatment paradigms for neurological and other disorders. MultiStem’s unique mechanism may shift the treatment of stroke by expressing a range of therapeutically relevant proteins and other factors to deliver multiple clinical benefits, including reducing inflammation, protecting damaged or injured tissue, and enhancing the formation of new blood vessels in regions of ischemic injury. By considering the effects of secondary immune modulation, therapeutic benefit may be better observed over longer periods of time versus current commercial treatments like tPA,” stated Sean I. Savitz, M.D., Director at World Stroke Organization and Frank M. Yatsu, M.D. Chair in Neurology at UTHealth Houston’s McGovern Medical School.

In November 2022, Athersys convened a meeting of stroke Key Opinion Leaders (KOLs) to discuss potential changes to the MASTERS-2 trial design, given clinical findings from Healios’ TREASURE trial in Japan as well as from the MASTERS-1 study. Following input from these KOLs, Athersys is considering possible protocol adjustments in support of the overall goal of de-risking the program, while also reflecting evolving best standard-of-care. Because any protocol changes would need to be submitted to the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) prior to being implemented, it is premature to discuss what, if any, modifications might be made.

“Clinical results to date – including those from TREASURE and MASTERS-1 – demonstrate success that meets or even exceeds the efficacy that tPA delivers to stroke patients after 90 days when administered within approximately 30 minutes of the ischemic event. I believe that MultiStem holds potential to be a significant advancement in the treatment of stroke with longer-term patient benefits by providing a solution as impactful as tPA while significantly extending the treatment window. In fact, I see strong parallels between tPA treatment results in the 1990s and MultiStem today,” stated David Chiu, M.D., FAHA, Professor, Elizabeth Blanton Wareing Chair in the Eddy Scurlock Stroke Center, Houston Methodist Hospital, Weill Cornell Medical College and a participant on the Athersys KOL panel.

“Following productive discussions during our recent meeting with stroke KOLs, the totality of data from MASTERS-1 and TREASURE gives us confidence that MultiStem progressively improves patient outcomes, with emerging evidence of meaningful benefit 365 days post-treatment. We intend to share these data with the FDA and EMA later this quarter to evaluate the design of the MASTERS-2 trial and ensure it supports this hypothesis,” stated Willie Mays, Ph.D., Executive Vice President and Head of Regenerative Medicine and Neuroscience Programs at Athersys.

Providing further support for the clinical potential of cell therapy, a recently published review article¹ lead-authored by Dr. Savitz in Nature Reviews Neurology synthesized results from more than 20 years of animal studies that illustrate how trans-differentiation, cell replacement and restoration of damaged tissues in the central nervous system are highly unlikely mechanisms. The authors consider the evidence for an alternative model in which exogenous cells migrate to peripheral organs and modulate and reprogram host immune cells to generate an anti-inflammatory regenerative environment.

The authors state, “Regenerating tissue by modulating inflammatory and repair mechanisms is widely applicable to a range of neurological disorders, from acute to neuro-degenerative disorders, autoimmune and inflammatory diseases and chronic neurological disorders.”

Commenting on an announcement made last month by Healios, Athersys’ MultiStem partner in Japan, Mr. Camardo added, “We are encouraged by Healios’ recent letter of intent to establish a new company for the joint development of MultiStem for acute respiratory distress syndrome, or ARDS, with investment from Mitsubishi UFJ Capital. We believe their partnership demonstrates continued momentum in clinical development and reflects the growing interest from larger companies in MultiStem.”

Athersys management will be in San Francisco during the 41^st J.P. Morgan Healthcare Conference January 9-11, 2023 meeting with investors, analysts and prospective business partners. Please email tpatel@lhai.com to request a meeting.

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¹ Cell-based therapies for neurological disorders — the bioreactor hypothesis https://www.nature.com/articles/s41582-022-00736-4

About MultiStem^®

MultiStem^® (invimestrocel) cell therapy is a patented regenerative medicine product in clinical development that has shown the ability to promote tissue repair and healing in a variety of ways, such as through the production of therapeutic factors 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 therapy 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 tolerability demonstrated in clinical studies, we believe that MultiStem therapy could provide a meaningful benefit to patients, including those suffering from serious diseases and conditions with unmet medical need.

About Athersys

Athersys is a biotechnology company engaged in the discovery and development of therapeutic product candidates designed to extend and enhance the quality of human life. The Company is developing its MultiStem^® cell therapy product, a patented, adult-derived “off-the-shelf” stem cell product, initially for disease indications in the neurological, inflammatory and immune, and other critical care indications and has several ongoing clinical trials evaluating this potential regenerative medicine product. Athersys has forged strategic partnerships and a broad network of collaborations to further advance MultiStem cell therapy toward commercialization. Investors and others should note that we may post information about the Company on our website at www.athersys.com and/or on our accounts on Twitter, Facebook, LinkedIn or other social media platforms. It is possible that the postings could include information deemed to be material information. Therefore, we encourage investors, the media and others interested in the Company to review the information we post on our website at www.athersys.com and on our social media accounts. Follow Athersys on Twitter at www.twitter.com/athersys. Information that we may post about the Company on our website and/or on our accounts on Twitter, Facebook, LinkedIn or other social media platforms may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. You should not place undue reliance on forward-looking statements contained on our website and/or on our accounts on Twitter, Facebook, LinkedIn or other social media platforms, and we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.

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This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These forward-looking statements relate to, among other things, the expected timetable for development of our product candidates, our growth strategy, and our future financial performance, including our operations, economic performance, financial condition, prospects, and other future events. We have attempted to identify forward-looking statements by using such words as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “should,” “suggest,” “will,” or other similar expressions. These forward-looking statements are only predictions and are largely based on our current expectations.

In addition, a number of known and unknown risks, uncertainties, and other factors could affect the accuracy of these statements. Some of the more significant known risks that we face are the risk that we will be unable to raise capital to fund our operations in the near term and long term, including our ability to obtain funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources, on terms acceptable to us or at all, and to continue as a going concern and our ability to successfully resolve the payment issues with our primary contract manufacturer and gain access to our clinical product. The following risks and uncertainties may cause our actual results, levels of activity, performance, or achievements to differ materially from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements: our collaborators’ ability and willingness to continue to fulfill their obligations under the terms of our collaboration agreements and generate sales related to our technologies; In addition, a number of known and unknown risks, uncertainties, and other factors could affect the accuracy of these statements. Some of the more significant known risks that we face are the risk that we will be unable to raise capital to fund our operations in the near term and long term, including our ability to obtain funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources, on terms acceptable to us or at all, and to continue as a going concern and our ability to successfully resolve the payment issues with our primary contract manufacturer and gain access to our clinical product. The following risks and uncertainties may cause our actual results, levels of activity, performance, or achievements to differ materially from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements: whether the FDA and the EMA accept any protocol changes to our MASTERS-2 trial design and the timing of such acceptance, if at all; our collaborators’ ability and willingness to continue to fulfill their obligations under the terms of our collaboration agreements and generate sales related to our technologies; the possibility of unfavorable results from ongoing and additional clinical trials involving MultiStem; the risk that positive results in a clinical trial may not be replicated in subsequent or confirmatory trials or success in an early stage clinical trial may not be predictive of results in later stage or large scale clinical trials; our ability to regain compliance with the Nasdaq continued listing requirement; the timing and nature of results from MultiStem clinical trials, including the MASTERS-2 Phase 3 clinical trial evaluating the administration of MultiStem for the treatment of ischemic stroke; our ability to meet milestones and earn royalties under our collaboration agreements, including the success of our collaboration with Healios; the success of our MACOVIA clinical trial evaluating the administration of MultiStem for the treatment of ARDS induced by COVID-19 and other pathogens, and the MATRICS-1 clinical trial being conducted with The University of Texas Health Science Center at Houston evaluating the treatment of patients with serious traumatic injuries; the availability of product sufficient to meet our clinical needs and potential commercial demand following any approval; the possibility of delays in, adverse results of, and excessive costs of the development process; our ability to successfully initiate and complete clinical trials of our product candidates; the possibility of delays, work stoppages or interruptions in manufacturing by third parties or us, such as due to material supply constraints, contamination, operational restrictions due to COVID-19 or other public health emergencies, labor constraints, regulatory issues or other factors that could negatively impact our trials and the trials of our collaborators; uncertainty regarding market acceptance of our product candidates and our ability to generate revenues, including MultiStem cell therapy for neurological, inflammatory and immune, cardiovascular and other critical care indications; changes in external market factors; changes in our industry’s overall performance; changes in our business strategy; our ability to protect and defend our intellectual property and related business operations, including the successful prosecution of our patent applications and enforcement of our patent rights, and operate our business in an environment of rapid technology and intellectual property development; our possible inability to realize commercially valuable discoveries in our collaborations with pharmaceutical and other biotechnology companies; the success of our efforts to enter into new strategic partnerships and advance our programs; our possible inability to execute our strategy due to changes in our industry or the economy generally; changes in productivity and reliability of suppliers; the success of our competitors and the emergence of new competitors; and the risks mentioned elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2021 under Item 1A, “Risk Factors” and our other filings with the SEC. You should not place undue reliance on forward-looking statements, and we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.

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