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Biotech / Medical : ASTM-AASTROM BIOSCIENCES: STEM CELL RESEARCH -- Ignore unavailable to you. Want to Upgrade?

To: Panita who wrote (391)	12/17/1998 9:05:00 AM
From: AV8R	Read Replies (1) \| Respond to of 1084

Recent letter from CEO to shareholders. Copied from another thread. "To Our Shareholders: The evolution of a new medical technology from the laboratory to clinical practice is both challenging and exciting. Aastrom Biosciences is in the process of making this transition, and we are looking forward to changing the lives of patients through our products for the growing practice of cell therapy, and thereby building value for our shareholders. There is an increasing need in medicine for the use of living cells to transplant into patients to restore or repair different tissues that have been damaged by disease, injury or toxic treatments. Numerous researchers around the world have learned how to grow these valuable cells, but generally by using highly technical, hands-on laboratory procedures which have not been practical in a typical hospital setting. Aastrom has developed a novel platform product line - the AastromReplicell™ Cell Production System - that is designed to enable hospitals to routinely produce cells for transplantation therapies. This year, Aastrom has successfully used prototypes of the AastromReplicell™ System in clinical trials. In studies underway at multiple clinical sites in the United States, bone marrow cells produced using the AastromReplicell™ System were successfully used to complete a full bone marrow transplant in cancer patients. Those same cells also enabled an otherwise ineffective blood stem cell transplant to become effective. These demonstrations are an important part of the foundation we are building for the use of this product in standard stem cell therapy procedures for cancer patients. Another type of clinical study was also initiated this year, designed for the AastromReplicell™ System to produce transplant cells from donor umbilical cord blood (UCB) samples. Children who have aggressive blood diseases, such as leukemia, are in need of stem cells from a transplant to obtain a new blood and immune system, but may lack a suitable bone marrow or blood stem cell donor. Cord blood from donors has been shown to be an effective alternative source of these cells and is being increasingly saved for these types of transplants. Generally, the more cells available, the better the patient recovery, but unfortunately, the quantity of cord blood available from a single donor is limited, resulting in problematic recoveries and survival. The AastromReplicell™ System is being used in a trial at Duke University Medical Center (under the direction of Joanne Kurtzberg, M.D.) to increase the number of transplantable cord blood cells in an effort to improve recovery outcomes in children with these types of otherwise fatal blood diseases. This trial, conducted under an FDA Investigational Device Exemption, was expanded this year based on positive initial results. A similar clinical study, using AastromReplicell™ System-expanded cord blood cells for adult cancer patients, is also underway at Loyola University Medical Center in Chicago and Hackensack Medical Center in New Jersey. In addition to stem cell therapy, the AastromReplicell™ System is designed to be used for other cell types and therapies. In this regard, we have been conducting preclinical studies with cells such as T-cells and dendritic cells to be used in the treatment of cancer and viral infections. In an important new development, the unique growth environment of the AastromReplicell™ System has now been shown to produce certain cell types that have improved biologic function compared with cells produced using other cell culture approaches. This important advancement supports the design and function of the AastromReplicell™ System to provide both clinical access to desired cells, as well as an improved therapeutic cell product. A principal objective for Aastrom is to now advance the AastromReplicell™ System to commercialization. There are three key steps needed to accomplish this objective: (i) complete the transition of the AastromReplicell™ System from prototype to the production level; (ii) demonstrate the use of the AastromReplicell™ System in clinical treatments; and (iii) gain approval from the applicable regulatory agencies. Aastrom is on track to have the AastromReplicell™ System platform and the lead stem cell therapy kits at final production level as early as the end of 1998, after which we plan to affix the CE Mark necessary to begin marketing in certain European countries. In the United States, the production-level systems will be used to begin the pivotal clinical trials necessary to support an FDA regulatory filing. The clinical utility of the system is now being demonstrated in our clinical trials. As these trial results are published in medical journals, the medical marketplace will become increasingly informed of the AastromReplicell™ System's potential for the treatment of patients. To support this progress, Aastrom has been growing, with key personnel additions this year in our quality system, clinical, regulatory and product support areas. We continue to conduct our manufacturing through contract relationships with specialized medical device manufacturers. Toward this end, we completed our commercial instrument manufacturing agreement with SeaMED Corporation (Nasdaq: SEMD) this year. As you are aware, in recent months small cap healthcare stocks have suffered a valuation decline. Data provided by SG Cowen Securities indicate that this sector - which includes Aastrom - declined over 40% from August 1997 to August 1998. As a member of this group, Aastrom's stock has also dropped over this period. While disappointing, we do not believe that this trend reflects our extensive progress over this period which has positioned us for the completion of the AastromReplicell™ System, the initiation of U.S. pivotal trials, and our preparation for European launch of the AastromReplicell™ System for stem cell therapy. The emergence of new cell therapies holds a promising and bright future in improving patient care, and Aastrom has strengthened its position as a leader to enable key therapies to transition from the laboratory to the hospital. Your support of the Company is an integral part of our progress - and it is this progress that should, in return, enhance the value for you, our shareholders. Sincerely, R. Douglas Armstrong, Ph.D. President and Chief Executive Officer September 30, 1998"