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Pluristem's New Data Proves Potency For Its Clinical Platform

Jan. 21, 2014 11:53 PM ETPLUR
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Long/Short Equity, Special Situations

Seeking Alpha Analyst Since 2012

Ray Dirks has been a respected analyst on Wall Street for decades. Ray has written two books,” The Great Wall Street Scandal” and “Heads You Win, Tails You Win”, published by McGraw-Hill and Bantam Books respectively. Dirks opened his own securities analysis firm after gaining much attention in the financial press during the 1970s and 1980s. Ray earned his place in the history books while working as a securities research analyst. He got a tip from a disgruntled employee of a company called Equity Funding that this firm had built its business model upon massive commercial and accounting fraud. Most research analysts on Wall Street took Equity Funding's numbers at face value, and recommended the stock. Dirks, however, began his own investigation, found the tip credible, then warned both his firm's top institutional clients (who sold out their positions) and the SEC. He also tried, unsuccessfully, to interest The Wall Street Journal in the story. It turned out that the tip was right, and Equity Funding eventually collapsed in a manner that would prefigure some of the scandals that have been seen on the Street today.

Readers of journalism, dependent on a daily diet of current news expect objectivity, clarity and at least some degree of intelligence. This did not happen in a recent piece printed in Globes, an Israeli news outlet. The Globes author, Gali Weinreb, made the mistake of trying to interpret upcoming clinical trial information surrounding one of the hottest biotech firms in her nation - Pluristem Therapeutics (PSTI) - who just recently revealed astounding news of efficacy in muscle injury after hip surgery, with their PLX-PAD cells showing 500% improvement over placebo in the change of maximal contraction force of the gluteal muscle.

From an article posted last Sunday, Ms. Weinreb failed to grasp the important fact that no one in the cell therapy industry but Pluristem can manufacture product at such low cost while keeping up quality and securing regulatory blessing. This will go a long way toward future commercialization. An uncomplimentary comparison between Pluristem and its Australian competitor Mesoblast, Ltd. is not warranted, as Ms. Weinreb likes to think, because in reality the acquisition of stem cells by both companies vastly differs, favoring Pluristem. Their patents for harvesting cells, younger and more vigorous and granted in Mesoblast's own backyard, should result in proof that Pluristem technology is superior.

Ms. Weinreb then makes the point that Pluristem's early phase muscle injury studies showing non-toxicity are not so critical when in reality they are. And yes, they are "interesting", and then some. Regulators view safety data very carefully. It is essential to continuing along a clinical path.

Volatility in biotech shares is not a reason to point fingers. Nor is the fact that companies may want to reach out to the public with results of a clinical study. This is what they do. Why Ms. Weinreb cannot grasp that is beyond logic, if she indeed covers her journalistic subjects with any degree of diligence and professional concern.

Pluristem's CEO, Zami Aberman, had the courage to state that if results of the muscle injury study went south, so would other trials. This did not happen. Efficacy was shown and millions of people will benefit. Contrary to Ms. Weinreb's misguided musings, Pluristem will give to the world not just interesting but also valuable work that has the ability to change the course of medicine.

Disclosure: I am long PSTI, .

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