Maxim analysts believe that Pluristem is a well-positioned company with a unique product and a strong SWOT (strengths, weaknesses, opportunities, and threats) product analysis that it expects to progress solidly over the next year as a global phase II trial begins in intermittent claudication (IC).
The firm notes that in June 2011, Pluristem signed a license with United Therapeutics (UTHR, $49.87, Not Rated) for the development of PLX cells in pulmonary disorders. The license agreement initiated at $7M and includes an additional $37.5M in regulatory milestones, as well as other attractive elements. Maxim believes this could be one of many therapeutically focused deals to come.
Also noted in July, Pluristem announced (in anticipation of the start of the phase II study in IC) that the company has selected CPC Clinical Research for trial support services related to enrolling and sustaining clinical sites. The IC study population will be comprised of ~150 patients (Fontaine class IIb/Rutherford category 2-3) in a dose-escalation, placebo-controlled, double-blinded study.
Maxim points out that Pluristem utilizes Placental eXpanded (PLX cells) in the treatment of a variety of inflammatory and ischemic conditions. The company has developed a manufacturing system which utilizes a bioreactor that allows the growth of cells in a 3D culturing methodology
and the process is designed to simulate a range of ischemic conditions which allows the product to be tailored for specific indications (such as PAD, CLI, ARS, PAH, and even orthopedics). The system itself is designed to be very efficient translating into high manufacturing margins.
Maxim assumes that Pluristem enters the critical limb ischemia (CLI) market in 2016. The analysts are not assuming any other revenues as part of their model, however, they believe that it is extremely likely that Pluristem will advance multiple programs into the clinic later this year and next.
Maxium provides three valuation metrics - FCF, discounted EPS, and sum of the parts - and are modeling Pluristem out to 2018. Maxim only assumes success in CLI and have not included milestones or deal revenues related to United Therapeutics or other new partners. This derives a 2018 EPS number of $3.30, which they discount at 30% and equally-weight the three metrics to derive an $8.00 price target. In a recent article of mine, I give a 3 month to one year price target of $5.00-$7.00 a share, which is in line with Maxium's estimate.
Other recent calls from Maxim on bio-pharmas this year include:
Exelixis engages in developing small molecule therapies for the treatment of cancer. Its focus is on developing a cabozantinib product candidate that inhibits MET, VEGFR2, and RET proteins, which are key drivers of tumor growth, vascularization, and/or metastasis.
Athersys engages in the discovery and development of therapeutic products in various disease areas in the United States. Its clinical development programs are focused on treating inflammatory and immune disorders, neurological conditions, cardiovascular disease, and other conditions.
Indenix engages in the discovery and development of drugs for the treatment of human viral diseases in the United States and Europe. Its primary research and development focus is on the treatment of patients with hepatitis C virus (HCV).
Achillion discovers, develops, and commercializes anti-infective drug therapies in the United States and internationally. It focuses on the development of antivirals for the treatment of chronic hepatitis C infection; and the development of antibacterials for the treatment of resistant bacterial infections.
Maxim is a solid firm with a good history of correct calls throughout the years, so I expect the firm to be right on the money with its call on Pluristem.
Additional disclosure: Family members are long PSTI.
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