Interview: Pluristem Life Systems VP Dr. Prather

by: H.S. Ayoub

Stem cell research has been one of the most controversial medical, scientific, and political issues of the last decade. Conservative outcries against the use of embryos to harvest multi-potent stem cells have been loud and clear, while the liberal viewpoint that early cells do not constitute "life" and should be used for medical research has been equally strong.

But the majority of stem cell research around the world should not fall within the realm of these debates, as a larger percentage of stem cells used by researchers are harvested from umbilical cords of newborns and adult tissue, such as skin, nasal lining, and even teeth.

In fact, most publicly traded companies involved in stem cell research utilize non-embryonic sources; companies such as Aastrom Biosciences (ASTM), StemCells (STEM), and Cytori Therapeutics (NASDAQ:CYTX).

One such company which has so far fallen under the radar of Wall Street investors is Pluristem Life Systems (PLRS.OB). I talked to Senior VP of Corporate Development Dr. William R. Prather about the company's stem cell research program and how it plans to stand out among the crowd;

[BHI] Please give our readers a brief history of Pluristem.

(DR. Prather) Pluristem was formed as the result of a reverse merger with a Nevada public company called “A.I. Software, Inc.” in April, 2003. On May 5, 2003, Pluristem entered into a license agreement with the Weizmann Institute of Science and the Technion-Israel Institute of Technology to acquire an exclusive license for an innovative stem cell production technology. This production technology is a three dimensional (3D) cellular expansion technology termed PluriX.

This technology, if fully developed, may offer novel solutions to make procedures such as bone marrow transplants and other methods of cell therapy more accessible to patients suffering from leukemia, lymphoma, myeloma and a broad range of complicated diseases and disorders. On May 22, 2007, Pluristem purchased the patents from these institutions for approximately $2 million. These institutions then invested this money in Pluristem’s recent financing.

The Company’s first planned product, PLX-I, which are mesenchymal stem cells (MSCs) derived from the placenta and expanded using the Company’s PluriX production technology, addresses the global shortfall of matched tissue for bone marrow transplantation [BMT] by improving the engraftment of hematopoietic stem cells (HSCs) contained in umbilical cord blood [UCB]. An investigational new drug [IND] application is expected to be filed for PLX-I in 2007, with clinical trials scheduled to begin between late 2007 and early 2008.

The primary end point of the study will be safety but the Company will be able to obtain some efficacy data as well because the cohorts in the study will have a hematological malignancy and are unable to obtain a suitable donor match with a traditional BMT

PLX-I seeks to remedy the key limitation of BMT: the need for an almost perfect tissue match between donor and patient. Pluristem’s unique technology allows for the use of UCB as a source of HSCs that are needed for the transplant. The attributes of these PLX-I cells allow them to be used successfully even if there isn’t a perfect match between donor and patient.

BMT requires a process called “Engraftment” where newly transplanted HSCs begin to produce normal quantities of mature blood cells. Pluristem’s technology provides for UCB cells to engraft at a rate 300% to 500% greater than if PLX-I cells were not used.

In the Pluristem process, MSCs are obtained from the placenta and expanded in the Company’s proprietary bioreactor system (PluriX). This biosystem creates a three-dimensional natural environment that closely resembles the structure and function of the body’s bone marrow. This 3-D environment -- unlike other cell therapies that employ two dimensional environments -- permits stem cells to grow and reproduce outside of the body without differentiation (a process where unspecialized stem cells give rise to more specialized cells). Cells derived from the PluriX process are then used together with HSCs derived from UCB as a safe and effective alternative to BMT. PLX cells are also being actively studied by the Company for additional clinical applications.

To accomplish its growth plan, the Company has several resources available including a strong patent portfolio, a 25 person research and development team based in Israel, strategic relationships with major research institutions, a strong balance sheet, and a seasoned management team and Board. The Company has expanded its presence in the United States, where it is incorporated, with a U.S. headquarters in Edwards, Colorado. The Company’s development work is conducted at a company-owned GMP certified manufacturing facility of over 7,000 square feet.

How has Pluristem circumvented the political and ethical controversy surrounding stem cell research?

Pluristem does no research nor deals in any way with stem cells which are embryonic in nature. Pluristem’s PLX cells are expanded mesenchymal stem cells (MSCs). These MSCs are adult stem cells and come from the placenta, an organ which has been traditionally thrown away after the birth of a child.

Has the environment outside of the U.S. helped in alleviating some of these concerns?

Once the public realizes what type of cell Pluristem deals with, then there is not only no concern, but a feeling that Pluristem is honorable in making use of a stem cell that comes from an organ that was traditionally thrown away.

How and where does the company collect umbilical cord blood for research?

Pluristem does not collect umbilical cord blood. The cord blood that has been used in our research has been donated and the cord blood that will be used in our clinical trials comes from either public or private cord blood banks.
However, Pluristem does work with mesenchymal stem (MSCs) cells that are derived from the placenta. Currently, the placentas Pluristem works with have been donated to the Company by hospitals.

How is Pluristem's PluriX bioreactor different from competing blood stem cell reactors?

Traditionally, stem cells have been expanded using a two-dimensional (2D) process that includes the addition of cytokines and other growth factors known to potentially cause nuclear chromosomal aberrations. Pluristem uses a proprietary three-dimensional (3D) process that does not include the addition of any cytokines, growth factors or other adulterants. This 3D environment closely resembles the structure and function of the body’s bone marrow. The resultant PLX cells are unique functionally as well as immunologically. The PLX cells are able to evolve into a variety of tissues such as fat, bone, tendon, and ligaments in addition to creating a favorable milieu for the growth and evolution of other cells such as HSCs. Pluristem PLX cells are also not only immune privileged (unable to evoke an immune response) but immunosuppressive (able to suppress an immune response). These attributes will hopefully play a major role in reducing or eradicating transplantation reactions such as graft versus host disease for Pluristem’s PLX – I cells used for the indication as an alternative to BMT.

Brief us on your two most advanced programs, PLX-1 and PLX-2. What is the difference and what has research concluded so far?

PLX-2 was to be a personalized product and, for that reason and the resultant limitation in potential market size, Pluristem is no longer developing this product.
PLX-I is an allogeneic, off the shelf product which needs no matching to be administered to the patient. PLX-I is being developed as a logical, effective alternative to BMT (see Ques.1 above)

From a business perspective, what is the size of the market for PLX-1?

PLX-I positions the company as a potential major player in HSC expansion allowing the use of stored umbilical cord blood for BMT. There are estimates that approximately 85,000 patients annually who are in need of a BMT don’t receive the transplant because there is an unsuitable donor match. If we add to this an estimated 15,000 patients who annually received autologous transplants because of the unavailability of matched donors, we conclude that approximately 100,000 patients annually could benefit from PLX-I. At an average ASP of $15,000 for PLX-I, this translates into potential market for the Company for this first product of approximately $2 billion.

How would the company utilize the potential success with PLX-1 and in terms of expanding its research focus?

Pluristem believes their PLX cells can be used for a number of other indications in addition to being an alternative to BMT, including the following:

Limb Ischemia - to enhance angiogenesis into tissue sites previously rendered ischemic.
The injection of PLX cells into the limb ischemic Balb-C mouse model has demonstrated blood flow improvement.

Parkinson Disease - In vitro data has suggested that PLX cells were able to differentiate into dopaminergic neurons, the cytokines GDNF, BDNF, IGF-1, and astrocytes markers.

Ischemic Stroke - to improve functional recovery after stroke
The injection of PLX cells into spontaneously hypertensive rats that had undergone middle cerebral artery occlusion, a commonly accepted ischemic stroke model, demonstrated functional recovery over a control group that did not receive PLX cells.

Multiple Sclerosis - to improve the function of MS patients
Researchers using MSCs in treating MS suggests a variety of mechanisms to potentially help these patients.

Bone and Soft Tissue Healing – to improve the healing of orthopedic injuries

In a variety of in vitro and in vivo experiments, MSCs have demonstrated an improvement in the rate and quality of the healing of bone, ligament, tendon and meniscus injuries.

Looking forward to the next 12 months, what would you like to say to current and potential investors?

Pluristem believes investors should be rewarded over the next 12 months from announcements surrounding discoveries and improvements in the Company’s technology, milestone announcements surrounding Pluristem’s indications for their PLX cells and clinical trial for PLX-I, and potential collaborations. These include:

Fall 2007 – Filing of the Investigational New Drug Application [IND] for PLX – I for enhancing the engraftment of UCB in BMT

Winter 2007 – FDA acceptance of the IND (Pluristem does not need to hear from the FDA, 30 days after submission, if there are no comments from the FDA, then the IND is deemed to be approved)

Winter 2007 – The announcement from Pluristem of the second clinical indication for their PLX cells.

Winter 2007 – The initiation of animal trials of Pluristem’s PLX cells for this second indication

Beginning of 2008 – The initiation of Phase I clinical trials (the safety of PLX – I for enhancing the engraftment of UCB in BMT) at two sites in the U.S.