I typically track my top 10 “stocks to buy” for several months before I decide to purchase, I put them on my watch list, collecting data and doing my own analysis over time.
Lurking in the shadows I wait, patiently, for the opportune time to jump in. In the past I have recommended stocks such as SNSS, GNBT, ICGN, ASTM and BPAX prior to them making a move.
Now its time for another stock pick.
Pluristem (NASDAQ: PSTI)originally caught my attention back in April of 2008 when positives news regarding its Placental eXpanded (PLX) cells pushed the stock from just under $2 to a little over $5 per share. PLX cells are mesenchymal stromal cells obtained from the placenta and expanded using the Company's 3D PluriX technology. The results showed that PLX cells showed a significant advantage in ameliorating functional deficiencies.
This was more than a year ago.
At the time I knew the PLX cells and 3D PluriX technology were unique and very promising and both had huge market potential, but I sat on the sidelines, hesitating to jump in as I was concerned about the company’s solvency. The remainder of 2008 proved to be a difficult period for PSTI. Cash reserves were low and access to capital was limited due to the credit crunch. In January 2009 however the sun began to shine through. An institutional investor poured a much needed $1.2 million into the cash strapped company.
In May another favorable stock sale raised an additional $1.3 million. Things were starting to get interesting again.
See Article: Pluristem Therapeutics Inc. Collaborates With Pharmicell Europe GmbH
See Article: Pluristem Therapeutics Inc. Announces First Patient Enrollment In Phase I Clinical Trial
Then, in June 2009, PSTI was awarded a $1.9 million grant from the office of the Chief Scientist of the Israeli Government. This is the fourth consecutive year that Pluristem has received this respected grant. And, on August 4th the Israeli Government actually increased the grant to $2.4 million.
See Article: Pluristem Therapeutics Was Awarded a $1.9 Million Grant From the Office of the Chief Scientist in the Israeli Government
See Article: PSTI: $2.3M Funding from Israeli Govt. for Clinical Trials of PLX-PAD
According to the most recent 10Q, PSTI estimates that its operating cash expenses in the next 12 months would be approximately $6 Million so the recent fund raising along with the Government grants should sustain the company for at least another year.
Pluristem's PluriX 3D Bioreactor is PSTI’s Leading technology.
Pluristem's patented (US 6,911,201) bioreactor, trademarked PluriX™, promotes the rapid expansion of stem cells without the use of growth factors, cytokines and other exogenous materials in emulating the bone marrow microenvironment.
The PluriX™ Bioreactor System is designed to be a system of stromal cell cultures and substrates that create an artificial physiological environment where adherent stromal cells (ASCs) can grow and reproduce outside of the human body. Unlike conventional two-dimensional (2D) culturing methods, the Company’s PluriX™ Bioreactor creates a three-dimensional (3D) microenvironment that closely resembles the structure and function of the body’s bone marrow environment. By mimicking the natural environment that exists within human bones, the system “tricks” stem cells into growing and reproducing in the same way they would in living organs. Because the size and scale of the PluriX™ Bioreactor is larger than that of human bone marrow, stem cell growth can be greatly expanded.
Pluristem’s first product, PLX - PAD, has been developed as an unrelated donor-patient (allergenic) product intended to treat the limb ischemia from Peripheral Artery Disease (PAD). PAD is a chronic disease that progressively restricts blood flow in the limbs and can lead to serious medical complications. This disease is often associated with other clinical conditions, including hypertension, cardiovascular disease, hyperlipidemia, diabetes, obesity and stroke. Critical Limb Ischemia (CLI) is used to describe patients with chronic ischemia induced pain, ulcers, tissue loss or gangrene in the limb. CLI represents the end stage of PAD patients who need comprehensive treatment by vascular surgery or a vascular specialist. In contrast to coronary and cerebral artery disease, Peripheral Artery Disease (PAD) remains an under-appreciated condition that, despite being serious and extremely prevalent, is rarely diagnosed and even less frequently treated. Consequently, mortality in PAD patients exceeds that of patients with myocardial infarction and stroke; indeed only mortality due to colorectal cancer outweighs that of PAD.
The Market for PLX-PAD
In the US alone, it is estimated that 8-12 million people suffer from limb ischemia.
Industry experts have estimated that the therapeutics used in the treatment of limb ischemia market is $4 Billion.
Additional drugs in PSTI’s pipe:
PLX-IBD for Inflammatory Bowel Disease
PLX-MS for Multiple Sclerosis
PLX-STROKE for Ischemic Stroke
PLX-BMT as an Alternative to Bone Marrow Transplantation (BMT)
So, what will move the company’s shares in the near term?
1) PSTI will release the updated clinical data for its leading product PLX-PAD at noon on 08/19/09 (Wednesday). William Prather R.ph., M.D., Pluristem’s senior vice president will present the study in an oral presentation at the MSC2009 Regenerative Medicine and Adult Stem Cell Therapy Conference
2) The 2009 Second Quarter Earnings Report is due out soon. The exact date has yet to be confirmed, but since PSTI filed its last 10Q on May 12, it should be sometime this week. With money in its coffers and exciting news on the horizon regarding its trials shareholders may not have to wait much longer to be rewarded for their patience.
3) Pluristem’s shares are currently trading below their 60 day moving average despite the upward trend of the company’s business. My data tells me that PSTI’s shares are oversold.
Current Price: $1.42 3 Month Target: $3 One Year Target: $5
* Disclosure: Long PSTI
The author of this article is not a licensed analyst and the purpose of this article is for information sharing only, not recommendation for any stock buying, selling and shorting activities. Please do your own research before making any trading decision.
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