Pluristem Therapeutics - Nasdaq CM - PSTI

                                                                                                    September 4, 2012         


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 fully owns its patent portfolio of18 granted patents and 71 pending applications in 12 patent families.

Pluristem shares continue to trend higher as additional indications are researched, 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.

The Situation

Pluristem has a strong patent portfolio, company-owned GMP certified manufacturing and research facilities, strategic relationships with major research institutions and a seasoned management team.  The Company is moving from Phase I to Phase II trials for key indications and the stock could benefit from the increasing news flow.

The Company

Pluristem Therapeutics Inc., based in Haifa, Israel, is a leading developer of placenta-based cell therapies. The Company's patented PLX (PLacental eXpanded) cells drug delivery platform releases an array of therapeutic proteins in response to a variety of local and systemic inflammatory diseases. PLX cells, grown in Pluristem’s proprietary 3-D micro-environmental technology, are an off-the-shelf product that requires no tissue matching or immune-suppression treatment prior to administration.  Pluristem is developing its PLX cells in several therapeutic areas:

Peripheral Artery Disease (PAD). Pluristem’s PAD research is the furthest-along of Pluristem’s clinical programs.  PAD also represents the largest market potential for Pluristem, which the Company estimates at $18 billion worldwide.  Pluristem has completed Phase I clinical trials in critical limb ischemia, intermittent claudication, and Bueger’s disease (which received Orphan Drug status from the U.S. F.D.A.).  These trials showed PLX cells to be safe and potentially effective for the treatment of end-stage PAD. In addition, Pluristem has completed a pre-clinical research Proof of Concept study with PLX cells for diabetic foot ulcers. 

Phase II clinical trials in intermittent claudication are scheduled to begin at the first of eleven sites in the U.S. in September, with other sites in Europe and Israel following soon thereafter.  Pluristem is gearing up for a Phase II clinical trial in Bueger’s disease, which is prevalent in India resulting from smoking Indian bidis tobacco product.  Pluristem received Indian approval in August.

The Company ascertains that current treatments, including vasodilators and anti-platelet therapies are inadequate for PAD, and surgical treatments are suitable only for a small percentage of PAD patients.

Skeletal Injuries. Pluristem estimates the global market for treatment of muscle trauma resulting from athletic injuries and hip replacement surgery approaches $7 billion.  Pluristem has completed pre-clinical studies with PLX cells in these areas.  In August, Pluristem received approval from the Paul-Ehrlich-Institute, the medical regulatory body in Germany, to commence a Phase I/II randomized, double blind, placebo controlled study to assess the safety and efficacy of its PLX cells, through intramuscular injection during hip replacement, for the regeneration of gluteal musculature injured during the surgery.

Central Nervous System Diseases. Pluristem estimates the neuropathic pain and ischemic stroke market at $11 billion worldwide, and has completed pre-clinical studies in both therapeutic areas with PLX cells.  Current treatment for neuropathic pain includes non-steroidal anti-inflammatory drugs, opiates, and anticonvulsant and antidepressant drugs, alone or in combination. In cases that are difficult to treat, invasive or implantable electrical stimulation devices are sometimes used.

Ischemic stroke occurs when a blood clot in an artery supplying the brain interrupts blood supply, which can lead to brain cell death, brain damage and sometimes death. According to the American Stroke Association, stroke kills more than 137,000 people a year, making it the number four cause of death in the U.S. Ischemic stroke represents 87 percent of all strokes.

Autoimmune Diseases. Pluristem estimates that the global multiple sclerosis and inflammatory bowel disease market approaches $10 billion.  To date, pre-clinical proof of concept studies with PLX cells have been completed in both indications.

Bone Marrow Recovery. Pluristem estimates that the market for PLX cells for bone marrow recovery exceeds $500 million worldwide. The Company has completed pre-clinical studies using PLX cells, which are derived from placenta, as adjuvant for umbilical cord blood (UCB) transplantation; pre-clinical studies are also underway in treating radiation sickness.

The Company believes that PLX cells offer an off-the-shelf alternative for patients with relapsed or high-risk hematologic malignancies who cannot undergo surgery to use his/her own bone marrow (autologous BMT), cannot obtain cells from a suitable donor, or obtain sufficient umbilical cord blood for therapy.

In February, Pluristem announced that, following preliminary discussions with several governmental authorities, it will expand its research and development efforts on an acute radiation exposure treatment. The announcement comes as governments around the world have broadened their searches for easily administered and effective radiation countermeasures.

The Extra Bonus

Pluristem has continued to attract grants and other non-dilutive sources to fund its research and development.  In August, Pluristem renewed a second five-year Collaborative Research Agreement with the Berlin-Brandenburg Center for Regenerative Therapy (BCRT) at Charite - University Medicine Berlin.   During the first five years, Pluristem and BCRT collaborated on a variety of indications utilizing Pluristem's PLX cells including neurological and cardiovascular indications, which together represent an estimated global market of $40 billion.

In April, Pluristem received approval for a $3.1 million grant from the Israeli Office of the Chief Scientist to cover R&D expenses through the end of 2012.  This is the seventh grant of this kind received from the OCS and is subject to repayment of grant monies through royalties.

In June 2011, Pluristem entered into an exclusive license agreement with United Therapeutics for the use of its PLX cells to develop and commercialize treatment of pulmonary hypertension.  Under the agreement, United Therapeutics will receive exclusive worldwide license rights for the development and commercialization of the Company's PLX cell-based product to treat pulmonary hypertension.  Pluristem received an upfront payment of $7.0 million; a payment schedule totaling up to $37.5 million upon reaching certain regulatory milestones; reimbursement of up to $10.0 million if Pluristem establishes a manufacturing facility in North America; reimbursement of certain other developmental costs; and following commercialization of the product, royalties and the purchase of commercial supplies of the developed product from Pluristem at a specified margin over cost. In August 2011, the License Agreement became effective following the consent of the Office of the Chief Scientist of Israel.


The stock hit an intraday high of $5 on August 17th 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.




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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.