Seeking Alpha
, CP Reports (2 clicks)
Long/short equity, special situations, research analyst
Profile| Send Message|
( followers)  

The world watched in May as Pluristem (NASDAQ:PSTI) healed a young girl dying from bone marrow that was so diseased it had lost most of its blood cells. No medical intervention had worked. Yet after two intramuscular injections of PLX cells, within weeks, she left the hospital and has been well ever since.

It might be easy to believe this was a fluke, but the company has just done it again. This time, the patient was a middle-aged woman with lymphoma who had radiation and chemotherapy and, like the girl, did not respond to bone marrow transplants, becoming sicker, with no chances left. Also like the girl, she received only two intramuscular injections of PLX cells one week apart. Two weeks later, her blood cell count was back to normal and she was released in good health.

Israeli TV networks are all over this ground-breaking story and it is certainly big news for a reason.

Bone marrow transplants are one of the most vile and expensive medical treatments today. Large amounts of research and development money has been useless in coming up with an alternative. Patients stay sick with flu-like symptoms up to one year after transplant. Many suffer from graft-versus-host disease, where the patient's body rejects the actual treatment. Companies like Pfizer (NYSE:PFE), Eli Lilly (NYSE:LLY), and AstraZeneca (NYSE:AZN) spend money to find substitutes for chemotherapy instead of making bone marrow transplants work better. Other huge drug firms just try to treat the horrible symptoms of chemotherapy with products like Neulasta by Amgen (NASDAQ:AMGN) or Emend by Merck (NYSE:MRK).

Pluristem has been working in its own quest for a viable BMT replacement. Last June, the company presented data at the 2012 Bio International Convention that showed positive results of an intramuscular injection of its PLX cells on a range of blood disorders that included primary and secondary bone marrow failure from chemotherapy and radiation therapy in cancer, and, an ancillary market, acute radiation syndrome (ARS).

Cancer companies command huge take-out premiums. Speculation over Medivation, Inc. (NASDAQ:MDVN) with its experimental cancer drug made shares rise 300% this year.

Since approval of Provenge, Dendreon (NASDQ:DNDN) has been a favorite for take-over rumors - especially since it seems to keep failing to deliver on its own game plan and disappointing the market.

Another target is Onyx Pharmaceuticals (NASDAQ:ONXX) with a new potential blockbuster which is being watched closely by Celgene (NASDAQ:CELG).

As I have said before in other articles there is always risk in any stock. Share price could linger or lose steam if the management team fails to execute their game plan and reach announced milestones in a timely manner.

As with any biotech, regulatory risk is always present. And Cell Therapy is a new cutting edge market which has yet to be adopted. Still, these possible risks are minimal compared to the upside realities and we are not alone in our enthusiasm. Furthermore, we believe the cost-effectiveness of PSTI's products all point to significant future shares in multiple sizeable markets. The company is well-funded with approximately $42 million in cash and equivalents reported in their most recent filings, so it does not have the financing risk that we see in a lot of small biotech companies. We always urge investors to do their own due diligence.

Pluristem, using a platform technology that has been successful in diseases of the leg arteries, heart, and lungs, all multi-billion dollar markets, has found what looks like an answer for patients with no options but death.

The company will file for Orphan Drug status which means that their PLX cells for bone marrow transplant has a faster path to approval and could be on the market in less than a year. If I was confident of Pluristem's prospects before, this latest development makes me certain that our target of $8 in the next few months is not only reasonable, but may be very conservative, and that shares could increase in value by up to 7 times in the next 12 months and individuals.

Source: Pluristem's Cell Therapy For Bone Marrow A Blockbuster In The Making