Goldman Research sees 50 percent upside for Pluristem
Jan 05, 2012 -- Pluristem Therapeutics Ltd. (Nasdaq:PSTI; DAX: PJT: PLTR) "looks like a great pure play on stem cells," says Goldman Small Cap Research founder Rob Goldman, and he predicts a 50 percent valuation gain for the placental stem cell drug development company.
Goldman's interest in Pluristem is because, in contrast to other stem cell-based therapeutic companies, it does not use controversial embryonic stem cells, but stem cells derived from the placenta of newborns. In addition, "In an effort to set the stage for potential mass market utilization, management is one step ahead. The company has already implemented in-house manufacturing and commercial production capabilities to mass-produce "off-the-shelf" products rather than harvest them petri dishes."
Goldman explains, "This stage is critical as Pluristem has already completed Phase I clinical trials for its lead product, PLX-PAD, which is targeted for patients with critical limb ischemia ((blockage of the arteries in the limbs, which can lead to gangrene and amputation), the final stage of Peripheral Artery Disease (PAD). While a total of 20 million Americans are diagnosed with varying stages and forms of PAD, CLI affects 2.8 million people, prompting 160,000 major amputations annually. It is estimated that this disease costs $10 billion each year."
Goldman cites the favorable results of Pluristem's Phase I clinical trial, its plans for Phase II clinical trials in the US and Europe, and its portfolio of treatments ready for both clinical and pre-clinical trials. He notes that it has been granted 17 patents and has 69 patents pending. He also favorably cites the company licensing agreement with United Therapeutics Inc. (Nasdaq: UTHR) for Pluristem's PLX cells for pulmonary hypertension.
Goldman concludes, "With a unique stem cell derivation approach, solid development progress, which has been vetted by United Therapeutics, and manufacturing capabilities, Pluristem appears to be a great way to play the stem cell market. We expect the initiation of clinical trials next year to serve as a catalyst for the stock. Typically, biotechs receive a valuation boost of $30-40 million for each product in Phase II. Therefore, once it reaches these development milestones, we think a 50 percent gain is in the bag."
Pluristem's share price rose 4.1 percent by early afternoon on the TASE to NIS 10.08, after rising 0.4 percent on Nasdaq yesterday to $2.55, giving a market cap of $111 million.
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Guy Katsovich
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