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I have always praised the potential of Pluristem's (PSTI) unique PLX cell therapy to take over the dysfunctional drugs sold by Big Pharma, many of them blockbusters that crowd the medical spaces that Pluristem is in, giving patients disappointing, if not harmful or lethal results. PLX cells use a natural material, the placenta, they are safe and effective, aren't a life-long commitment from the patient like pills taken daily, don't require painful and extensive intravenous therapy, and costs are lower. Patients resume their lifestyles after treatment instead of getting sicker.

Pluristem's platform technology is more valuable than the offerings of drug companies many multiples its size. The markets it plans to enter command high price tags. Experts believe that Targeted drugs and personalized medicines are could to be the alternative to the billion-dollar-plus blockbusters, and that the decline of mass-market drugs has come the rise of "orphan blockbusters" In this article I will bring investors up to date on what the competition has, and show why I believe it is not acceptable.

The latest big news last week on September 5th, is that Pluristem just announced a third bone marrow patient whose life was saved using PLX cells. No other company can do this. The bone marrow market is $1.3 billion and all Big Pharma has come up in the last 40 years are ways to counteract the harm chemotherapy does, drugs to go along with the chemotherapy, or cocktails of two existing drugs that pump more poison into the body. A good example is the spectacular flop of combining the cancer drug Tarceva, made by Genentech, part of Roche Holdings (OTCQX:RHHBY) and Celebrex for arthritis, sold by worldwide giant Pfizer (PFE). While being tested, it was found that Tarceva caused liver failure and a warning letter was sent by the FDA. Development never went past Phase II.

The popular drug Rituxan made by Biogen Idec (BIIB), that's given with chemotherapy, does $5 billion a year and has been around a while, but still cancer patients have to be 'dialed down' to get the best dosage. This is not pleasant. After hours of chemo infusion, there are six more hours of Rituxan and when the patient's explosive diarrhea subsides, the doctor determines that the dosage is correct.

No matter what they throw at us, whether it makes us vomit less or costs $50,000 a year, research and development budgets for the leading cancer companies are huge. Combined, Pfizer, AstraZeneca (AZN), Novartis AG (NVS), and Eli Lilly (LLY) spent almost $30 billion last year and employed tens of thousands of people in their frantic search for something new that works.

The only other approach is to treat some of the devastating effects of chemotherapy, and there are problems here, too. Aranesp, a $600 million drug from Amgen (AMGN) came under pressure several years ago when a ten-year study of 56,000 cancer patients showed that those taking Aranesp were twice as likely to develop blood clots. Things got worse when a desperate sales force tried to push the drug on doctors by touting its benefits, and Amgen was forced to pay $780 million in a whistle-blower lawsuit. Amgen didn't stop there, and it came out with Neulasta, a new and improved Neupogen to help prevent infection, but patients say it makes them more miserable than the chemotherapy and forces them to stay in bed with aching bones and joints for 24 hours. Merck (MRK), with its $8.5 billion research budget, was able to squeeze out Emend for nausea, and even this pulls in $400 million per year.

Yet the cancer companies still attract huge take-out premiums. I recently wrote that excitement over an experimental cancer drug from Medivation, Inc. (MDVN) caused shares to skyrocket during the year, and Provenge, the controversial but cutting-edge cancer vaccine from Dendreon (DNDN) put it in the forefront for takeover rumors. Genentech was snapped up by Roche for $44 billion and Genzyme Corp grabbed by Sanofi (SNY) for $20 billion for their cancer pipelines. Last month, our esteemed colleague Sharon di Stefano noted that analysts are predicting billion dollar sales of a new blood cancer drug from Onyx Pharmaceuticals (ONXX) that is still being tested, with a lot of attention from powerhouses Bayer AG, Takeda Pharmaceutical Co., and Celgene Corp. (CELG). In addition to the success Pluristem in Bone Marrow transplant patients Pluristem has also recieved government funding (NIH) for rescue of bone marrow following radiotherapy or chemotherapy.

For Pluristem, it doesn't end there. Using PLX cells for peripheral artery disease (PAD), intermittent claudication (IC), and Buerger's disease, together a worldwide market of more than $12 billion, they'll give us a one-stop shop for all three problems without having to take the current blockbuster drugs that scare the FDA and excite the lawyers. The best case is Plavix, Bristol-Myer Squibb's (BMY) $7 billion anti-clot medicine that carries the FDA black box warning because the drug was found to be ineffective in up to 14% of people taking it!

Life-threatening bleeding is listed as a side effect for Plavix for 2% of users, which might not sound like much until you figure that with the size of this market, 70,000 people could bleed to death trying to treat a disease. Lawsuits are mounting, and Bristol-Myers along with its partner Sanofi will have to answer court documents that show studies where Plavix is no more effective than aspirin.

Two other blockbuster markets that Pluristem has shown promise in but hasn't gotten much investor attention are pulmonary fibrosis and pulmonary hypertension. The first is screaming for a drug that works. For the five million people that have it, most have to suffer until their lungs scar up and turn brittle, and breathing becomes impossible. Intermune, Inc.'s (ITMN) Esbriet was a big disappointment, but Bristol-Myers stayed in the game with a half billion dollar buy-out of tiny Almira Pharmaceuticals. Work is still in progress.

What's out there for pulmonary hypertension is laughable. This is a rare disease, affecting about 30,000 people in the US with a worldwide market size of $3 billion, but a third die from it because the drugs available have big problems. Most are injections to constrict blood vessels but they cause sepsis, a dangerous infection carried in the bloodstream to all organs of the body that could then shut down. That hasn't stopped United Therapeutics (UTHR) or GlaxoSmithKline (GSK), though, who racked up sales of a combined $700 million for their drugs last year. Gilead Sciences (GILD) recently had to stop Phase II trials of a drug that turned out to be no better than the placebo. Actelion (OTCPK:ALIOF) has had Tracleer out for more than 10 years with sales last year of $1.6 billion, and a side effect history of liver toxicity hasn't stopped it from selling the drug. So patients get to decide - would they rather die from major organ failure or from their lungs exploding. Investors might recall that United Therapeutics struck a nice deal with Pluristem to start testing their PLX cells for pulmonary hypertension.

Although I am very confident that PLX cells will prove to be far better than the blockbusters, I always like to make readers aware of the risks of investing in stocks, and biotechs are notorious for wide price fluctuations on regulatory news, or lack of it, and what happens or doesn't happen in clinical trials. Pluristem has plenty of money with $42 million in cash, and good early clinical data, but there are no guarantees for the success of future studies, especially since cell therapy is new.

The potential rewards, however, are great. There isn't one market Pluristem could eventually enter that is worth less than several billion dollars. For this reason, I am holding on to my short-term price target of $10 and watching with anticipation the good news I'm expecting from this company.

Source: Broad Markets, Big Money, Harmful Drugs - Pluristem Takes On The Blockbusters