NEW YORK (TheStreet) -- Athersys(ATHX) - Get Report stock is up 22.46% to $1.26 on heavy trading volume on Thursday after the company announced a license agreement with Healios on a treatment for strokes.
The companies will collaborate on a stem cell therapy, known as MultiStem, that treats ischemic stroke and is being developed by Athersys. Ischemic strokes, which cause blood not to reach the brain, accounts for about 87% of all strokes, according to the National Stroke Association.
Under the agreement, Healios, a regenerative medicine company, will have exclusive development rights to MultiStem in Japan, the companies announced on Friday.
Athersys, which specializes in regenerative medicine, will receive an initial license fee of $15 million and is eligible for sales milestones that could reach $185 million.
"Healios has an experienced and accomplished leadership team that recognizes the importance and transformational potential of the regenerative medicine field," Athersys CEO Gil Van Bokkelen said in a statement. "They also have a compelling vision for our collaboration that includes the potential to work together across several important indication areas in a highly focused and efficient manner, which is why we selected them as our new partner."
So far today, 3.75 million shares of Athersys have traded, well above the company's 30-day average of about 262,000 shares.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate ATHERSYS INC as a Sell with a ratings score of D-. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has significantly decreased by 37.7% when compared to the same quarter one year ago, falling from -$4.72 million to -$6.50 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, ATHERSYS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- ATHX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 25.18%, which is also worse than the performance of the S&P 500 Index. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- ATHERSYS INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ATHERSYS INC continued to lose money by earning -$0.35 versus -$0.54 in the prior year. This year, the market expects an improvement in earnings (-$0.34 versus -$0.35).
- Net operating cash flow has increased to -$3.68 million or 41.09% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.81%.
- You can view the full analysis from the report here: ATHX