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Biotech Stock Mailbag: Aastrom BioSciences

BOSTON ( TheStreet) -- As you read this week's abbreviated Biotech Stock Mailbag, I'm on a Chicago-bound plane to cover the American Society of Clinical Oncology (ASCO) annual meeting.

I'll be live-blogging from the ASCO meeting starting tomorrow morning and continuing through Monday, so please check TheStreet's Web site throughout the weekend for all the latest news and buzz on cancer drug stocks from what is the most important cancer drug research meeting of the year.

Christian O. emails, "The market doesn't seem to care much about the latest results from the Aastrom BioSciences (ASTM) critical limb ischemia trial. What am I missing here? It seems like the company is giving positive signs that the drug works. I expected the stock to be much higher. Do you have any ideas about what is happening?"

Aastrom is developing a personalized, or patient specific, stem cell therapy for the treatment of critical limb ischemia. Patients with chronic CLI have obstructed arteries and reduced blood flow in the arms and legs, which can lead to open wounds and amputation in the most severe cases.

Interim, six-month data from Aastrom's phase II study were released last November. Wednesday, the company announced final results from the same study, indicating that ixmyelocel-T (crazy name) demonstrated a statistically significant improvement in time to first occurrence of treatment failure at 12 months compared to placebo -- the study's primary endpoint.

Despite what looks like good news, Aastrom's stock was trading relatively flat Thursday as I write this column. A few thoughts on what's going on:

Aastrom frustrated investors by not providing any real data in its press announcement of the final study results. The company claims it needs to keep the data under wraps for presentation at a future medical meeting, but c'mon, that excuse doesn't wash. Aastrom was able and willing to divulge plenty of interim numbers from this same trial last fall, so keeping final results secret now isn't justified.

If you take Aastrom's words at full face value without actually seeing the data, it seems as if the final results improved over what was presented during the six-month interim analysis. Most importantly, the improvement in amputation-free survival at 12 months trended more favorably in ixmyelocel's direction than the largely equivocal results observed at the previous interim analysis.

This is important because amputation-free survival at 12 months will be the primary endpoint of the planned phase III studies.

When will the phase III studies start? This might be the real reason why Aastrom shares fell following Wednesday's announcement. The company has been going back and forth with the FDA for nine months to finalize a Special Protocol Assessment (SPA) to govern the design of the phase III studies in CLI.

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