Pluristem Therapeutics - Nasdaq CM - PSTI

                                                                                                    April 28, 2014         

The Opportunity

Pluristem Therapeutics is well positioned within the stem cell treatment universe to treat an array of diseases or repair damaged tissue. Pluristem uses stem cells derived from full-term placenta, which are then expanded in the Company’s proprietary bioreactor system to create large-scale growth and consistency of the cells (PLX cells).  Since these cells do not derive from adult stem cells, they are immune-privileged and possess immuno-modulatory properties.  Pluristem holds significant intellectual property with 28 granted patents and over 100 pending applications globally.  

Pluristem shares have trended higher over the past four years as additional indications are investigated, the Company obtains more regulatory approval to conduct clinical trials in the U.S. and Europe, and the trials continue to show safety and efficacy.  However, the stock has had pullbacks from time-to-time and is currently trading about 20 percent below its January 16, 2014 high.

The Situation

Pluristem has a strong patent portfolio, company-owned GMP certified manufacturing and research facilities which can produce large, commercial-scale, consistent batches of cells, strategic relationships with major research institutions, corporate partnerships, and a seasoned management team.  As the Company continues to progress from Phase I to Phase II trials for key indications, the stock could benefit from this progress and from additional  partnerships. 

The Company

Pluristem Therapeutics, Inc, based in Haifa, Israel, is a bio-therapeutics company developing standardized cell therapy products for the treatment of a variety of local and systemic diseases.  The Company's patented PLX (PLacental eXpanded) cells function as a drug delivery platform that releases a number of therapeutic proteins in response to various local and systemic inflammatory and ischemic signals generated by the patient.   PLX cells are grown using Pluristem's proprietary 3D micro-environment technology that produces an off-the-shelf product that requires no tissue matching prior to administration.  

Pluristem's strategy is to develop and produce cell therapy products for the treatment of multiple disorders using several methods of administration.   The Company plans to execute this strategy independently, using its own personnel, through relationships with research and clinical institutions, and/or in collaboration with other pharmaceutical companies.  Pluristem has built its own Good Manufacturing Practices (GMP)-certified facility to enable it to produce cost-effective, in-house, clinical grade PLX cells in commercial quantities and to control all of its proprietary manufacturing processes.  Pluristem recently received US Food and Drug Administration (FDA) approval of this facility.  The Company announced today that the facility received the European Union’s Qualified Person Declaration, which will enable Pluristem to use cell therapies manufactured at the facility in all phases of its clinical trials conducted in the European Union. Based on this Declaration, Pluristem’s manufacturing and cell expansion operations were deemed compliant with EU GMP requirements.

Pluristem is pursuing multiple indications including Cardiovascular, Orthopedic, Pulmonary and Hematological diseases, as well as preeclampsia.  The Company estimates  with the total size of its target markets exceeds $60 billion.

Pluristem holds significant intellectual property with 28 granted patents and over 100 pending applications globally.

Recent Developments

Muscle Injury Study.  The Company recently announced top-line results of its Phase I/II muscle injury study.  The study demonstrated safety, and showed statistically significant improvements in increased muscle volume and strength when PLX-PAD (at a dose of 150 million cells) was compared with placebo.  Following these results, Pluristem plans to further develop PLX-PAD cells in the orthopedic and sports injury markets in potential collaboration with several orthopedic companies.

The results of this muscle injury trial are in line with prior Phase I/II clinical trials in critical limb ischemia (CLI) which demonstrated a significant improvement in its primary end point of amputation-free survival (AFS) when compared to historical data.

Intermittent Claudication Study.  Pluristem is currently enrolling study subjects for its U.S. and German Phase II studies  following the FDA's lifting of its clinical hold.   Additional trials are planned for Israel and South Korea .

Pulmonary Atrial Hypertension.  The Company, in collaboration with United Therapeutics, recently initiated a Phase I study in Australia and is enrolling study subjects.

Preeclampsia.  Pluristem is beginning to investigate the use of PLX-PAD cells in preeclampsia.  Independent studies conducted at the Texas A&M College of Medicine using PLX-PAD cells in preclinical animal models of preeclampsia showed efficacy in several parameters of the disease.  There is currently no treatment for preeclampsia, without terminating the pregnancy.  

The Company recently announced that it has applied to the U.S. Food and Drug Administration's Orphan Drug Designation program to grant orphan drug designation of the PLX cells for the treatment of severe preeclampsia.  This program provides special status to drugs and biologics which are intended for the safe and effective treatment, diagnosis or prevention of rare diseases/disorders that affect fewer than 200,000 people in the U.S., or that affect more than 200,000 persons but are not expected to recover the costs of developing and marketing a treatment drug.  To date, this FDA program has approved more than 400 drugs and biologic products for rare diseases since its inception in 1983.

Graft versus Host Disease.  The Company announced that PLX cells have also demonstrated efficacy in the treatment of GvHD, an often lethal complication of bone marrow transplantation, in animal models using placebo for comparison.  Pluristem is currently in discussion with a leading U.S. hematology cancer research center regarding a Phase I clinical trial using its PLX-PAD cells in GvHD.

Tendon Injuries.  The Company announced that orthopedic researchers at New York’s Hospital for Special Surgery conducted an independent study using Pluristem's PLX cells in animal models of tendon injury.  The success of these tendon injury studies has led Pluristem to continue to expand its research into other orthopedic and sports injury indications.

Recent Partnership Agreement.  Pluristem consummated an out-licensing and partnership agreement with South Korean-based healthcare company, CHA Bio&Diostech.  Under this agreement clinical research activities (initially for peripheral artery disease; PAD) will be funded by CHA; subsequent marketing revenues are expected to be split evenly between Pluristem and CHA.  Pluristem believes the South Korean market for PAD is 1 million people, and is expected to rise over time.  An advanced CLI clinical trial with CHA is also being planned.

Expanded Patent Portfolio.  Pluristem's intellectual property portfolio is a critical corporate asset.  The Company was issued several U.S. and non-U.S. patents within the past year, bringing its patent count to 28 issued patents and over 100 patent applications. 

Valuation

The stock hit a high of $4.47 on January 16 and has been consolidating since then.  In our judgment, it is reasonable to believe that the stock will break through to new highs as news of progress on clinical trials is released in coming months.  The median of five 12-month analyst price targets is $5.00, about 40 percent above the stock's current price.

 

 

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Analyst Certification

I, Denise Resnik, the research analyst of this snapshot report, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities and issuers; and that no part of my compensation, was, is, or will be directly, or indirectly, related to the specific recommendations or views contained in this report.