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Michael Morhamus
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My firm provides investment products and solutions for institutions and individual investors. I take particular attention to small and mid-cap companies in emerging markets. I like to research and trade good ideas; both long and short; with other experienced traders.
  • Gilead's Loss In The Pulmonary Hypertension Drug Race Puts Pluristem And Its Partner United Therapeutics Ahead Of The Rest 0 comments
    Aug 29, 2012 8:30 AM | about stocks: PSTI, UTHR, GILD, PFE

    Pulmonary arterial hypertension (NYSE:PAH) is a chronic syndrome characterized by abnormally high pressure in arteries leading from the heart to the lungs that cause dizziness, fatigue, and shortness of breath. Its cause is uncertain - some have blamed HIV, cocaine use, or the former diet drug fen-phen. Incidence in the US is roughly 1,000 people per year; at any one time, perhaps 30,000 are affected. Those with the disorder often go years without a proper diagnosis until exercise capacity is significantly limited and life expectancy greatly shortened. There is no cure, and current medications leave something to be desired.

    Pluristem Therapeutics' (NASDAQ:PSTI) platform technology of PLX cell therapy may present a new and effective way to treat the disease. Last year, the company struck a deal with United Therapeutics (NASDAQ:UTHR), whose drugs for PAH comprise the majority of United's revenue, to fund development. United's market presence with compounds for PAH have been characterized by good sales growth, despite products that carry a number of risks such as sepsis with its intravenous vasodilator and an inhaler version of the same drug that underwent a brief recall when the device caught fire. Clinical trials of a second generation drug have been troubled.

    The most recent blow in the pharmaceutical quest for a safe and effective drug for PAH came last week when Gilead Sciences, Inc. (NASDAQ:GILD), with a lackluster vasodilator tablet already on the market, halted development of cicletanineafter Phase II results showed no significant effect on an endpoint of exercise. Other drug offerings for PAH have been neither unique or without problems. GlaxoSmithKline's (NYSE:GSK) intravenous vasodilator Flolan has been associated with blood infection and fatalities. Tracleer, a tablet released in 2001 by Actelion Ltd (SIX: ATLN)(PINK:ALIOF) that prevents blood vessels from constricting, carries the potential for excessive bleeding and liver toxicity. Pfizer, Inc. (NYSE:PFE) capitalizing on its Viagra success, released PDE5 inhibitor Revatio in 2006 and United Therapeutics followed three years later with Adcirca, similar to Cialis made by Eli Lilly & Co. (NYSE:LLY). Both, naturally, carry the same risks as their sister drugs for erectile dysfunction. Sales growth of commercially available compounds for PAH, however, has been very good, with a worldwide market estimate of over $2.5 billion, based on sales of drugs now on the market.

    Gilead's absence should benefit Pluristem and United's efforts. Not only is a better drug essential for this disease that carries up to a 30% mortality rate, but United badly needs a new drug to keep, and expand, its PAH franchise. Keep your eye on shares of PSTI as there appears to be considerable upside from here, despite the fact that shares have vastly outperformed the over-all markets so far this year. These developments have certainly put Pluristem and its partner, United Therapeutics, at the front- as leaders- in this Billion Dollar race.

    Disclosure: I am long PSTI.

    Stocks: PSTI, UTHR, GILD, PFE
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