##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q/A
 Amendment No. 1
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDEDSEPTEMBER 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 Commission file number 0-22025
 AASTROM BIOSCIENCES, INC.
  Michigan
    
    94-3096597(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. employer
identification no.)24 Frank Lloyd Wright Dr. 
P.O. Box 376
Ann Arbor, Michigan
    
    48106(Address of principal executive offices)
    
    (Zip code)
 (Registrants telephone number, including area code)
 
 þ o
 o o
  Large accelerated filer  o
    
    Accelerated filer  o
    
    Non-accelerated filer  o
    
    Smaller reporting company  þ(Do not check if a smaller reporting company)
 o þ
  COMMON STOCK, NO PAR VALUE
(Class)
    
    28,251,787
Outstanding at October 31, 2010




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##### Table of Contents



Explanatory Note
  Background of Restatement
   (i)
    
    warrants to purchase an aggregate of 300,000 shares of the Companys common
stock, issued in April 2004 at an exercise price of $13.20 per share;(ii)
    
    warrants to purchase an aggregate of 320,248 shares of the Companys common
stock, issued in October 2004 at an exercise price of $13.92 per share;(iii)
    
    warrants to purchase an aggregate of 740,131 shares of the Companys common
stock, issued in October 2007 at an exercise price of $12.72 per share;(iv)
    
    Class A warrants to purchase an aggregate of 4,882,228 shares of the Companys
common stock, issued in January 2010 at an exercise price of $2.97 per share; and(v)
    
    Class B warrants to purchase an aggregate of 3,254,818 shares of the Companys
common stock, issued in January 2010 at an exercise price of $2.08 per share.
 Derivatives and Hedging
   2




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##### Table of Contents



Restatement of Other Financial Statements
  Internal Control Considerations
  Items Amended in This Filing
  
    
    Part I  Item 1. Financial Statements;
    
    Part I  Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations; and
    
    Part I  Item 4. Controls and Procedures.
   3




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##### 



AASTROM BIOSCIENCES, INC.
QUARTERLY REPORT ON FORM 10-Q/A
September 30, 2010
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Restated Financial Statements (Unaudited):
    
    5Consolidated Condensed Balance Sheets as of June 30, 2010 and September 30, 2010
    
    5Consolidated Condensed Statements of Operations for the quarters ended
September 30, 2009 and 2010 and for the period from March 24, 1989 (Inception)
to September 30,2010
    
    6Consolidated Condensed Statements of Cash Flows for the quarters ended
September 30, 2009 and 2010 and for the period from March 24, 1989 (Inception)
to September 30,2010
    
    7Notes to Consolidated Condensed Financial Statements
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    19Item 4. Controls and Procedures
    
    19PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    20Item 1A. Risk Factors
    
    20Item 6. Exhibits
    
    20Signature
    
    21Exhibit Index
    
    22Glossary
    
    23EX-31.1EX-31.2EX-32.1
  4




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 AASTROM BIOSCIENCES, INC.
(a clinical development stage company)
 
 CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited, amounts in thousands)
 June 30,
    
    
    September 30,2010
    
    
    2010(Restated)
    
    
    (Restated)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    14,119
    
    
    $
    14,466Short-term investments
    
    
    5,000
    
    
    
    Receivables, net
    
    
    16
    
    
    
    17Other current assets
    
    
    383
    
    
    
    505Total current assets
    
    
    19,518
    
    
    
    14,988Property and equipment, net
    
    
    1,013
    
    
    
    982Total assets
    
    $
    20,531
    
    
    $
    15,970LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    1,749
    
    
    $
    2,739Accrued employee benefits
    
    
    686
    
    
    
    508Current portion of long-term debt
    
    
    226
    
    
    
    240Warrant liabilities
    
    
    3,010
    
    
    
    3,109Total current liabilities
    
    
    5,671
    
    
    
    6,596Long-term debt
    
    
    79
    
    
    
    40Total liabilities
    
    
    5,750
    
    
    
    6,636Shareholders equity:Common stock, no par value; shares authorized
 62,500; shares issued and outstanding 
28,256 and 28,252, respectively
    
    
    217,873
    
    
    
    218,358Deficit accumulated during the development stage
    
    
    (203,092
    )
    
    
    (209,024
    )Total shareholders equity
    
    
    14,781
    
    
    
    9,334Total liabilities and shareholders equity
    
    $
    20,531
    
    
    $
    15,970
  5




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AASTROM BIOSCIENCES, INC.
(a clinical development stage company)
 
 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands except per share amounts)
 March 24, 1989Quarter ended
    
    
    (Inception) toSeptember 30,
    
    
    September 30,2009
    
    
    2010
    
    
    2010(Restated)
    
    
    (Restated)
    
    
    (Restated)Revenues:Product sales and rentals
    
    $
    73
    
    
    $
    
    
    
    $
    1,850Research and development agreements
    
    
    
    
    
    
    
    
    
    
    2,105Grants
    
    
    
    
    
    
    
    
    
    
    9,657Total revenues
    
    
    73
    
    
    
    
    
    
    
    13,612Costs and expenses:Cost of product sales and rentals
    
    
    32
    
    
    
    
    
    
    
    3,035Research and development
    
    
    2,911
    
    
    
    4,167
    
    
    
    164,933Selling, general and administrative
    
    
    946
    
    
    
    1,686
    
    
    
    75,545Total costs and expenses
    
    
    3,889
    
    
    
    5,853
    
    
    
    243,513Loss from operations
    
    
    (3,816
    )
    
    
    (5,853
    )
    
    
    (229,901
    )Other income (expense):(Increase) decrease in fair value of warrants
    
    
    9
    
    
    
    (99
    )
    
    
    10,361Other income
    
    
    
    
    
    
    
    
    
    
    1,249Interest income
    
    
    28
    
    
    
    25
    
    
    
    10,704Interest expense
    
    
    (13
    )
    
    
    (5
    )
    
    
    (469
    )Total other income (expense)
    
    
    24
    
    
    
    (79
    )
    
    
    21,845Net loss
    
    $
    (3,792
    )
    
    $
    (5,932
    )
    
    $
    (208,056
    )Net loss per share (Basic and Diluted)
    
    $
    (0.18
    )
    
    $
    (0.21
    )Weighted average number of common shares outstanding (Basic and Diluted)
    
    
    20,679
    
    
    
    28,255
  6




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AASTROM BIOSCIENCES, INC.
(a clinical development stage company)
 
 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands )
 March 24, 1989Quarter ended
    
    
    (Inception) toSeptember 30,
    
    
    September 30,2009
    
    
    2010
    
    
    2010(Restated)
    
    
    (Restated)
    
    
    (Restated)Operating activities:Net loss
    
    $
    (3,792
    )
    
    $
    (5,932
    )
    
    $
    (208,056
    )Adjustments to reconcile net loss to net cash used for operating activities:Depreciation and amortization
    
    
    151
    
    
    
    129
    
    
    
    6,722Loss on property held for resale
    
    
    
    
    
    
    
    
    
    
    110Amortization of discounts and premiums on investments
    
    
    
    
    
    
    
    
    
    
    (1,704
    )Stock compensation expense
    
    
    47
    
    
    
    485
    
    
    
    9,584Increase (decrease) in fair value of warrants
    
    
    (9
    )
    
    
    99
    
    
    
    (10,361
    )Inventory write downs and reserves
    
    
    
    
    
    
    
    
    
    
    2,239Stock issued pursuant to license agreement
    
    
    
    
    
    
    
    
    
    
    3,300Provision for losses on accounts receivable
    
    
    
    
    
    
    
    
    
    
    204Changes in operating assets and liabilities:Receivables
    
    
    (461
    )
    
    
    (1
    )
    
    
    (266
    )Inventories
    
    
    1
    
    
    
    
    
    
    
    (2,335
    )Other current assets
    
    
    (238
    )
    
    
    (122
    )
    
    
    (485
    )Accounts payable and accrued expenses
    
    
    482
    
    
    
    990
    
    
    
    2,682Accrued employee benefits
    
    
    (21
    )
    
    
    (178
    )
    
    
    508Net cash used for operating activities
    
    
    (3,840
    )
    
    
    (4,530
    )
    
    
    (197,858
    )Investing activities:Organizational costs
    
    
    
    
    
    
    
    
    
    
    (73
    )Purchase of short-term investments
    
    
    
    
    
    
    
    
    
    
    (217,041
    )Maturities of short-term investments
    
    
    
    
    
    
    5,000
    
    
    
    218,745Property and equipment purchases
    
    
    (54
    )
    
    
    (68
    )
    
    
    (5,949
    )Proceeds from sale of property held for resale
    
    
    
    
    
    
    
    
    
    
    400Net cash provided by (used for) investing activities
    
    
    (54
    )
    
    
    4,932
    
    
    
    (3,918
    )Financing activities:Net proceeds from issuance of preferred stock
    
    
    
    
    
    
    
    
    
    
    51,647Net proceeds from issuance of common stock and warrants
    
    
    4,300
    
    
    
    
    
    
    
    162,871Repurchase of common stock
    
    
    
    
    
    
    
    
    
    
    (49
    )Payments received for stock purchase rights
    
    
    
    
    
    
    
    
    
    
    3,500Payments received under shareholder notes
    
    
    
    
    
    
    
    
    
    
    31Restricted cash used as compensating balance
    
    
    68
    
    
    
    
    
    
    
    Proceeds from long-term debt
    
    
    
    
    
    
    
    
    
    
    751Principal payments under long-term debt obligations
    
    
    (117
    )
    
    
    (55
    )
    
    
    (2,509
    )Net cash provided by (used for) financing activities
    
    
    4,251
    
    
    
    (55
    )
    
    
    216,242Net increase in cash and cash equivalents
    
    
    357
    
    
    
    347
    
    
    
    14,466Cash and cash equivalents at beginning of period
    
    
    17,000
    
    
    
    14,119
    
    
    
    Cash and cash equivalents at end of period
    
    $
    17,357
    
    
    $
    14,466
    
    
    $
    14,466
  7




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AASTROM BIOSCIENCES, INC.
(a clinical development stage company)
 
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
 1. Organization and Summary of Significant Accounting Policies
    2. Basis of Presentation
     8




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##### Table of Contents



3. Restatement of Consolidated Financial Statements
 Background
   (i)
    
    warrants to purchase an aggregate of 300,000 shares of the Companys common
stock, issued in April 2004 at an exercise price of $13.20 per share;(ii)
    
    warrants to purchase an aggregate of 320,248 shares of the Companys common
stock, issued in October 2004 at an exercise price of $13.92 per share;(iii)
    
    warrants to purchase an aggregate of 740,131 shares of the Companys common
stock, issued in October 2007 at an exercise price of $12.72 per share;(iv)
    
    Class A warrants to purchase an aggregate of 4,882,228 shares of the Companys
common stock, issued in January 2010 at an exercise price of $2.97 per share; and(v)
    
    Class B warrants to purchase an aggregate of 3,254,818 shares of the Companys
common stock, issued in January 2010 at an exercise price of $2.08 per share.
 Derivatives and Hedging
  Impact of the Restatement
  9




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(in thousands except per share
amounts)
 Consolidated Condensed Balance SheetsAs PreviouslyReported
    
    
    Adjustments
    
    
    As RestatedAs of June 30, 2010Warrant liabilities
    
    $
    
    
    
    $
    3,010
    
    
    $
    3,010Total current liabilities
    
    $
    2,661
    
    
    $
    3,010
    
    
    $
    5,671Total liabilities
    
    $
    2,740
    
    
    $
    3,010
    
    
    $
    5,750Common stock
    
    $
    231,343
    
    
    $
    (13,470
    )
    
    $
    217,873Deficit accumulated during the
development stage
    
    $
    (213,552
    )
    
    $
    10,460
    
    
    $
    (203,092
    )Total shareholders equity
    
    $
    17,791
    
    
    $
    (3,010
    )
    
    $
    14,781As of September 30, 2010Warrant liabilities
    
    $
    
    
    
    $
    3,109
    
    
    $
    3,109Total current liabilities
    
    $
    3,487
    
    
    $
    3,109
    
    
    $
    6,596Total liabilities
    
    $
    3,527
    
    
    $
    3,109
    
    
    $
    6,636Common stock
    
    $
    231,828
    
    
    $
    (13,470
    )
    
    $
    218,358Deficit accumulated during the
development stage
    
    $
    (219,385
    )
    
    $
    10,361
    
    
    $
    (209,024
    )Total shareholders equity
    
    $
    12,443
    
    
    $
    (3,109
    )
    
    $
    9,334
 Consolidated Condensed Statements of OperationsAs PreviouslyReported
    
    
    Adjustments
    
    
    As RestatedFor the quarter ended September 30, 2009:(Increase) decrease in fair value
of warrants
    
    $
    
    
    
    $
    9
    
    
    $
    9Total other income (expense)
    
    $
    15
    
    
    $
    9
    
    
    $
    24Net loss
    
    $
    (3,801
    )
    
    $
    9
    
    
    $
    (3,792
    )Net loss per share (basic and diluted)
    
    $
    (0.18
    )
    
    $
    
    
    
    $
    (0.18
    )For the quarter ended September 30, 2010:(Increase) decrease in fair value
of warrants
    
    $
    
    
    
    $
    (99
    )
    
    $
    (99
    )Total other income (expense)
    
    $
    20
    
    
    $
    (99
    )
    
    $
    (79
    )Net loss
    
    $
    (5,833
    )
    
    $
    (99
    )
    
    $
    (5,932
    )Net loss per share (basic and diluted)
    
    $
    (0.21
    )
    
    $
    
    
    
    $
    (0.21
    )March 24, 1989 (Inception) to September 30, 2010:(Increase) decrease in fair value
of warrants
    
    $
    
    
    
    $
    10,361
    
    
    $
    10,361Total other income (expense)
    
    $
    11,484
    
    
    $
    10,361
    
    
    $
    21,845Net loss
    
    $
    (218,417
    )
    
    $
    10,361
    
    
    $
    (208,056
    )
 Consolidated Condensed Statements of Cash FlowsAs PreviouslyReported
    
    
    Adjustments
    
    
    As RestatedFor the quarter ended September 30, 2009:Net loss
    
    $
    (3,801
    )
    
    $
    9
    
    
    $
    (3,792
    )Increase (decrease) in fair value
of warrants
    
    $
    
    
    
    $
    (9
    )
    
    $
    (9
    )For the quarter ended September 30, 2010:Net loss
    
    $
    (5,833
    )
    
    $
    (99
    )
    
    $
    (5,932
    )Increase (decrease) in fair value
of warrants
    
    $
    
    
    
    $
    99
    
    
    $
    99March 24, 1989 (Inception) to September 30,
2010:Net loss
    
    $
    (218,417
    )
    
    $
    10,361
    
    
    $
    (208,056
    )Increase (decrease) in fair value
of warrants
    
    $
    
    
    
    $
    (10,361
    )
    
    $
    (10,361
    )
 10




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4. Fair Value Measurements
  
    
    Level 1 inputs: Quoted prices (unadjusted) for identical assets or liabilities in
active markets;
    
    Level 2 inputs: Inputs, other than quoted prices included in Level 1 that are
observable either directly or indirectly; and
    
    Level 3 inputs: Unobservable inputs for which there is little or no market data, which
require the reporting entity to develop its own assumptions.
    5. Stock-Based Compensation
  Service-Based Stock Options
  11




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##### Table of Contents



Quarter ended September 30,Service-Based Stock Options
    
    2009
    
    
    2010Expected dividend rate
    
    
    0
    %
    
    
    0
    %Expected stock price volatility
    
    
    72.3% - 72.8
    %
    
    
    70.6% - 71.4
    %Risk free interest rate
    
    
    2.8% - 3.0
    %
    
    
    1.7% - 2.1
    %Estimated forfeiture rate (per annum)
    
    
    10
    %
    
    
    10
    %Expected life (years)
    
    
    6.3
    
    
    
    6.0 - 6.3
  Weighted
    
    
    Weighted Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicService-Based Stock Options
    
    Options
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    ValueOutstanding at June 30, 2010
    
    
    3,283,180
    
    
    $
    3.40
    
    
    
    8.6
    
    
    $
    2,750Granted
    
    
    1,453,000
    
    
    $
    1.49Forfeited or expired
    
    
    (411,849
    )
    
    $
    5.44Outstanding at September 30, 2010
    
    
    4,324,331
    
    
    $
    2.56
    
    
    
    9.0
    
    
    $
    114,050Exercisable at September 30, 2010
    
    
    768,914
    
    
    $
    6.06
    
    
    
    6.5
    
    
    $
    
  Performance-Based Stock Options
    Weighted
    
    
    Weighted Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicPerformance-Based Stock Options
    
    Options
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    ValueOutstanding at June 30, 2010
    
    
    40,164
    
    
    $
    12.17
    
    
    
    6.4
    
    
    $
    0Forfeited or expired
    
    
    (2,083
    )
    
    $
    12.24Outstanding at September 30, 2010
    
    
    38,081
    
    
    $
    12.17
    
    
    
    6.1
    
    
    $
    0
  12




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6. Stock Purchase Warrants
  (i)
    
    warrants to purchase an aggregate of 740,131 shares of the Companys common stock,
issued on October 17, 2007 in connection with the Companys registered direct offering,
exercisable from April 18, 2008 through April 17, 2013 at an exercise price of $12.72 per
share;(ii)
    
    Class A warrants to purchase an aggregate of 4,882,228 shares of the Companys common
stock, issued on January 21, 2010 in connection with the Companys registered public
offering, exercisable for a five year period commencing on July 21, 2010 at an exercise
price of $2.97 per share; and(iii)
    
    Class B warrants to purchase an aggregate of 3,254,818 shares of common stock,
issued on January 21, 2010 in connection with the Companys registered public offering,
exercisable at any time from January 21, 2010 through July 21, 2010 at an exercise price
of $2.08 per share.
  October 2007 Warrants
    
    June 30, 2010
    
    
    September 30, 2010Closing stock price
    
    $
    1.49
    
    
    $
    1.55Expected dividend rate
    
    
    0
    %
    
    
    0
    %Expected stock price volatility
    
    
    80.4
    %
    
    
    79.7
    %Risk free interest rate
    
    
    1.0
    %
    
    
    0.6
    %Expected life (years)
    
    
    2.75
    
    
    
    2.50
 January 2010 Class A Warrants
    
    June 30, 2010
    
    
    September 30, 2010Closing stock price
    
    $
    1.49
    
    
    $
    1.55Expected dividend rate
    
    
    0
    %
    
    
    0
    %Expected stock price volatility
    
    
    66.3
    %
    
    
    67.6
    %Risk free interest rate
    
    
    1.8
    %
    
    
    1.3
    %Expected life (years)
    
    
    5.00
    
    
    
    4.75
 (in thousands)
 Warrant LiabilitiesBalance at June 30, 2010
    
    $
    3,010Increase in fair value
    
    
    99Balance at September 30, 2010
    
    $
    3,109
 7. Net Loss Per Common Share
  13




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Restatement
   Overview
    Safe
 Autologous
 Expanded
 A mixed population of cells
 Minimally invasive
  14




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Critical Limb Ischemia
     Dilated Cardiomyopathy
 Heart Failure: A Combined Medical and Surgical Approach
 15




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Results of Operations
     16




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Liquidity and Capital Resources
        17




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Off-Balance Sheet Arrangements
  Forward-Looking Statements
   
    
    potential strategic collaborations with others;
 
    
    future capital needs and financing sources;
    
    adequacy of existing capital to support operations for a specified time;
    
    product development and marketing plan;
    
    clinical trial plans and anticipated results;
    
    anticipation of future losses;
    
    commercialization plans; and
    
    revenue expectations and operating results.
 18




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
   Material Weakness
  Restatement of Consolidated Financial Statements
  19




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Remediation Plan
   Changes in Internal Control Over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Item 3. Defaults Upon Senior Securities
  Item 4. Submission of Matters to a Vote of Security Holders
  Item 5. Other Information
  
 Item 6. Exhibits
  20




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SIGNATURES
   AASTROM BIOSCIENCES, INC./s/Timothy M. MaylebenTimothy M. MaylebenPresident and Chief Executive Officer
(Principal Executive Officer)/s/Scott C. DurbinScott C. DurbinChief Financial Officer
(Principal Financial and Accounting Officer) 21




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EXHIBIT INDEX
 Exhibit No.
    
    Description10.1
    
    Form of indemnification agreement entered into between the Company and each of its
directors, including Timothy M. Mayleben, a director and the Companys President and
Chief Executive Officer, attached as Exhibit 10.1 to Aastroms Current Report on Form 8-K
filed on August 31, 2010, incorporated herein by reference.31.1
    
    Certification by Chief Executive Officer required by Rule 13a-14(a) or 15d-14(a) of the
Securities Exchange Act of 1934 (furnished herewith).31.2
    
    Certification by Chief Financial Officer required by Rule 13a-14(a) or 15d-14(a) of the
Securities Exchange Act of 1934 (furnished herewith).32.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (furnished herewith).
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GLOSSARY
 TERM
    
    DEFINITIONAdverse Event
    
    Any adverse change in health or side-effect that occurs in a person participating in a
clinical trial, from the time they consent to joining the trial until a pre-specified
period of time after their treatment has been completed.Autologous
    
    Originating from the patient receiving treatment. (Aastrom uses only autologous cells)BLA  Biologics License Application
    
    An application containing product safety, efficacy and manufacturing information
required by the FDA to market biologics products in the U.S.Catheter-DCM
    
    Aastroms U.S. Phase 2 clinical trial investigating catheter-based delivery of our
product in the treatment of dilated cardiomyopathy.CLI  Critical Limb Ischemia
    
    A vascular disease characterized by insufficient blood flow in the lower extremities
that causes severe pain, tissue loss or both.Controlled Clinical Trial
    
    A clinical study that compares patients receiving a specific treatment to patients
receiving an alternate treatment for the condition of interest. The alternate treatment
may be another active treatment, standard of care for the condition and/or a placebo
(inactive) treatment.DCM  Dilated Cardiomyopathy
    
    A chronic cardiac disease where expansion of the patients heart reduces the pumping
function to a point that the normal circulation of blood cannot be maintained.Double-Blind Clinical Trial
    
    Clinical trials in which neither the patient nor the physician know if the patient
received the experimental treatment or a control/placebo.FDA  Food & Drug Administration
    
    The U.S. FDA ensures that medicines, medical devices, and radiation-emitting consumer
products are safe and effective. Authorized by Congress to enforce the Federal Food,
Drug, and Cosmetic Act and several other public health laws, the agency monitors the
manufacture, import, transport, storage, and sale of $1 trillion worth of goods
annually.GMP  Good Manufacturing Practice
    
    GMP regulations require that manufacturers, processors, and packagers of drugs, medical
devices, some food, and blood take proactive steps to ensure that their products are
safe, pure, and effective. GMP regulations require a quality approach to manufacturing,
enabling companies to minimize or eliminate instances of contamination, mix-ups, and
errors.IMPACT-DCM
    
    Aastroms U.S. Phase 2 clinical trial investigating surgical delivery of our product in
the treatment of dilated cardiomyopathy.IND  Investigational New Drug
    
    An application submitted to the FDA for a new drug or biologic that, if allowed, will be
used in a clinical trial.Ischemia
    
    A shortage or inadequate flow of blood to a body part (commonly an organ or tissue)
caused by a constriction or obstruction of the blood vessels supplying it.LVEF  Left Ventricular Ejection
Fraction
    
    The fraction of blood pumped out of the left ventricle with each heart beat.Open-label Clinical Trial
    
    A trial in which both the treating physician and the patient know whether they are
receiving the experimental treatment or control/placebo treatment.Orphan Drug Designation
    
    Orphan drug refers to a drug or biologic that is intended for use in the treatment of
a rare disease or condition. Orphan drug designation from the U.S. Food and Drug
Association (FDA) qualifies the sponsor to receive certain benefits from the Government
in exchange for developing the drug for a rare disease or condition. The drug must then
go through the FDA marketing approval process like any other drug or biologic which
evaluates for safety and efficacy. Usually a sponsor receives a quicker review time and
lower application fees for an orphan product.
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TERM
    
    DEFINITIONPhase 1 Clinical Trial
    
    A Phase 1 trial represents an initial study in a small group of patients to test for
safety and other relevant factors.Phase 2 Clinical Trial
    
    A Phase 2 trial represents a study in a moderate number of patients to assess the safety
and efficacy of a product.Phase 2b Clinical Trial
    
    A Phase 2b trial is a moderately-sized Phase 2 trial that is more specifically designed
assess the efficacy of a product than a Phase 2a trial.Phase 3 Clinical Trial
    
    Phase 3 studies are initiated to establish safety and efficacy in an expanded patient
population at multiple clinical trial sites and are generally larger than trials in
earlier phases of development.Progenitor Cells
    
    A parent cell that gives rise to a distinct cell lineage by a series of cell divisions.Prospective Clinical Trial
    
    A clinical trial in which participants are identified and then followed throughout the
study going forward in time.Randomized Clinical Trial
    
    A clinical trial in which the participants are assigned randomly to different treatment
groups.SPP  Single-Pass Perfusion
    
    SPP is Aastroms proprietary technology that controls gas and cell culture media
exchange to enable the replication of early-stage stem and progenitor cells while
preventing their differentiation into mature cells.Stem Cell
    
    Unspecialized (undifferentiated) cells that retain the ability to divide throughout a
lifetime and give rise to more specialized (differentiated) cells which take the place
of cells that die or are lost. In culture, these undifferentiated cells possess the
ability to divide for indefinite periods in culture and may give rise to highly
specialized cells.
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