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April 1, 2013

Retrace and Rise, Athersys Back on the Move

Shares of Athersys, Inc. (NASDAQ: ATHX) surged to end the first quarter on Thursday, closing ahead by 12 percent at $1.68 as volume swelled to 3.7 million on the last day of March.  No announcements were made by the company.  What appears to be happening is a growing awareness of Athersys as it maneuvers through clinical trials with its MultiStem stem cell technology for a several indications.

MultiStem, the company’s proprietary “off the shelf” biologic product, is currently in 5 clinical stage programs, including aPhase II trial in partnership with Pfizer, Inc. (NYSE: PFE) for inflammatory Bowel Disease and an ongoing Phase II trial for ischemic stroke, which analysts and pundits believe has blockbuster potential.  Phase I clinical trials have been successfully completed with MultiStem as a potential new therapeutic for Acute Myocardial Infarction and HSC transplant/Graft versus Host Disease, with subsequent clinical trials anticipated.  Clearly, the company does not lack fundamental catalysts that could take the price per share to much higher levels.

In November and December, the stock price found a technical bottom at 95 cents, which was followed by a sharp climb to new 52-week highs $1.89.  As is typical, a retracement followed as some profit taking occurs following the stock price doubling.  Keeping its bullish trend, the price per share broke the trendline of the consolidation on Thursday to move 9.8 percent above the 50 day moving average and 23.5 percent above the 200 day moving average.

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Evidence of potential for ATHX chart can be gleaned not only from the technical components, but also from what analysts have to say.

In October, Maxim Group upped its price target for Athersys from $3 to $6 while maintaining its Buy rating.   First Analysis has a Buy rating with a $7 price target, and Piper Jaffray holds an Overweight rating with a price target of $4.  WBB also has a Buy rating on ATHX and a price target of $9.  Zacks upgraded Athersys in March from a Neutral rating to an Outperform rating in a note to investors, albeit with a modest price target of $1.80.

Articles across the Internet are also lending support to the Athersys opportunity.  Seeking Alpha contributor Craig Keolanui recently described Athersys as a “unique blend of low valuation, high hope and huge potential.”  Popular Seeking Alpha contributor Chemistfrog published an analysis of Athersys, MultiStem and the unique potential of the company, which was sent to the more than 1,200 people subscribed for real-time alerts on ATHX.  MedCity News provided a summary of the recent Athersys earnings conference call with a host of links for additional research, including a link to a prior MedCity article titled, “Athersys CEO: Stroke therapy could be one of the biggest blockbusters ever.”

In early trading on Monday, the stock is continuing the climb started last week, printing as high as $1.83 for gains of nearly 9 percent and drawing ever closer towards another new one-year high as the momentum looks to be kicking into gear again.

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