Did PSTI avoid the issues of disclosure having "played loose and fast" with public perception?
I reported yesterday that 7-yr-old girl with bone marrow disease died 4 mos. after PSTI said her life had been saved by its stem cells <from a report from Bloomberg>. But, she later died … without a note from Pluristem who administered the treatment. Didn't they have a responsibility to inform the public investors post their financing …?
Oppenheimer analyst Boris Peaker said in note … Pluristem stem cell treatment shouldn't be judged on single anecdotal cases of efficacy, <It is> not uncommon for cancer treatments to be declared "life-saving" if they extend survival by only a few weeks and companies <PSTI> don't report death of the patients. Oppenheimer rates PSTI outperform, Price Target of $5;
The only one to step out in this matter was Maxim's, Jason Kolbert, who was the first to respond stating, yesterday … that "the patient who died had returned to her home country of Romania and died of sepsis post the allogeneic therapy - and as he stated … "if she had stayed in Israel - she might she have had a better prognosis"! The analyst also reminded me … "that the allogeneic cells were long gone 4 months - after the initial treatment".
BioMed Reports (M.E.Garza) wrote (published) today … "A heavily skewed and apparently poorly researched report published by Bloomberg about Pluristem Therapeutics Inc. (NASDAQ:PSTI) on Thursday caused so much damage to share prices that company officials have publicly called for a published correction because "the article is factually inaccurate and misleading." While the Bloomberg piece was peppered with hard to argue facts, its main thesis was potentially libelous. "Facts" were either fabricated or simply not fact checked by the editors who approved them for publication.
But, there still seems to be a "disconnect" … between what was said and when <to Israeli publications … quoting BioMed Reports … "Company officials hid nothing. In fact, at the time, Pluristem CEO Aberman even spoke to Israeli media about the sad death of the young girl. Yesterday, Aberman told the same Israeli publication that Pluristem was unaware of the girl's death at the time of the offering, but only learned of it a few days later, because she was not being monitored by the company". Why not …?
The Bottom Line: Pluristem - check your rear-view mirror - why did so many "opine" and react to the Bloomberg article? In the cell therapy universe, PSTI's more than often "hyperbole" style has by turns been admired and derided. The "walls of reality" closed in … does this "on slot" of written matter talk about their relationships to the "street" and to the reporting <analyst and blogging" community? Maybe, instead of a "chosen" few - of calls returned by the US "contingent" … should their outreach be reviewed - many companies would have been on the phone all night from those in this time zone to correct perception but, not a word! When you have a negative issue - address it … immediately and move on the issue! Companies can recover from adversity but, it is hard for managements to recover from their practices. Cell therapy companies have enough issues with visibility … and attempts to "reconcile" their development programs with regulatory "realities" and the continuous hurdle of public perception <again> thus, "transparency" is the ultimate vehicle … no matter what one does - there is a population of investors that are "moved" by perception! Maybe, there is a lesson here but, the damage is done!
PSTI dropped on 11/8 to $2.85 down $0.85 from $3.69 and is rebounding at the market open <11/9> +$0.18 or +6.33% to $3.03.
Addendum … Pluristem … just announced that …a second of the three patients given the experimental stem cells has died after PSTI touted the treatments as "life-saving."
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.