PluriStem ($PSTI) : Letter to Shareholders

Pluristem Therapeutics (PSTI) provided a Letter from the CEO (the quarterly update), and it’s a good and comprehensive piece. Our take-away is as follows: Pluristem has cash ($43 million), the company is hiring great talent, and is making clinical progress. Their allogeneic product has the potential to be very unique, as an immuno privledged allo cell therapy product. In English what that may mean is the best of both worlds. An autologous like product (auto being self, like your own cells) but with a low cost of goods, "cells in a bottle, like pills in a bottle". With that said it is early days, as Pluristem marches forward in their lead indication, Critical Limb Ischemia (CLI). Aastrom (ASTM) is in the lead as they begin their Phase III trial (see today's prior note). There is no question in our mind that Pluristem's product may have the lowest cost of goods sold, which in CLI may be a critical factor. Other indications, muscle injury, et al, add additional catalysts to watch.

From Pluristem's News Letter:

Clinical Trials Update: Muscle Injury:

Pluristem plans to initiate a Phase II dose escalation trial using its PLX cells in muscle injury.

Its PLX cells will be administered into muscle routinely traumatized during hip replacement surgery in an effort to improve and shorten the rehabilitation time for the patient.

The study will enroll an estimated 18 patients and be conducted at the Klinik für Orthopädie, Charité Hospital, Berlin, Germany.

Pluristem has filed the Investigational Medicinal Product Dossier (IMPD) with the Paul-Ehrlich-Institut and will initiate the study upon regulatory approval.

Clinical Trials Update: Peripheral Artery Disease (PAD):

Pluristem plans to  initiate three clinical trials in the PAD area.

Clinical Trials Update: Intermittent Claudication (IC):

Pluristem plans a dose escalating Phase II trial in IC involving several clinical sites in the United States and Europe.

PSTI has finalized the study protocol, and will initiate the study upon regulatory approval of the Investigational New Drug (IND) Application in the United States and the IMPD in Europe.

Clinical Trials Update: Buerger's Disease:

The company plans to initiate a clinical trial in the U.S., Europe and India upon approval of the regulatory applications.

Clinical Trials Update: Critical Limb Ischemia (CLI):

Pluristem is planning a Phase II/III pivotal trial at multiple sites in the USA and Europe for CLI

The endpoint for this pivotal trial will be amputation free survival (AFS).

Based on recommendations of regulatory experts and potential collaborative partners, Pluristem has made the strategic decision to use only commercial-grade PLX cells for this pivotal clinical trial.

These cells will be manufactured in our new facility scheduled to be completed towards the end of 2012.

PSTI will then file the necessary documentation with the U.S. FDA and European Medicines Agency (EMA) and upon regulatory approval, will begin this important trial.

Clinical Trials Update: Radiation Exposure

In preclinical studies, Pluristem's PLX cells demonstrated statistically significant improvement as mitigators of the acute radiation syndrome (ARS) and as protectants of the bone marrow following radiation exposure in animals.

Manufacturing Update: The new manufacturing facility is on schedule with the build-out. Pluristem is one of the few cell therapy companies (other than NeoStem) that is focused on manufacturing at an early stage.

Financial Update:  In PSTI's recently released 10-Q quarterly report the company had approximately $43 million in cash and deposits.

Aastrom ($ASTM) patient enrollment

Aastrom Biosciences (NASDAQ: ASTM) announces initiation of patient enrollment in REVIVE phase III trial of Ixmyelocel-T ($1.79):

• ASTM has begun patient enrollment in the REVIVE Phase 3 clinical trial to assess the efficacy and safety of ixmyelocel-T in the treatment of patients with critical limb ischemia (CLI).
• The primary endpoint of the trial will be amputation-free survival at 12 months.
• The REVIVE clinical trial has also been granted Fast Track designation by the FDA.

Daily Dose Conclusion: This is positive as the trial gets underway. Investors are concerned that the lack of a partner means Aastrom has to fund this trial alone, which will be expensive. The likely conclusion then is that Aastrom will need to raise additional capital. At this valuation however a good amount of that is likely factored into he share price. Other earlier players in CLI include Pluristem (PSTI), and Cytomedix - Aldagen (CMXI). We have also recently written on Thermogenesis (KOOL) working in the CLI space.

Medistem ($MEDS) Initiates Collaboration With Chinese Conglomerate Aimed at Clinical Development of Endometrial Regenerative Cells for Critical Limb Ischemia

Medistem Inc. (OTC: MEDS) announced today initiation of joint efforts with the Chinese conglomerate, Shanghai Jia Fu Medical Apparatus Inc, in developing the Endometrial Regenerative Cell (ERC) “universal donor” stem cell product for the Chinese market. The initial focus of the collaboration will be treatment of critical limb ischemia, an advanced form of peripheral artery disease.

Medistem has previously received FDA clearance to begin a Phase I clinical trial using the ERC stem cells in this patient population. A scientific publication providing the rationale and supporting data for utilization of ERC in treatment of critical limb ischemia may be found at http://www.translational-medicine.com/content/pdf/1479-5876-6-45.pdf.

Video on MediStem's Source of Cells:

Daily Dose Conclusion: Critical Limb Ischemia (CLI) is getting crowded. Aastrom (ASTM) is in the lead in the US with a P3 FDA trial in motion. With that said the market capitalization for Aastrom has fallen sharply as trial has been expanded and costs rising. Definitive Phase II data should have translated into a pharma partnership but the Phase IIB data read missed the primary endpoint as the AFS (Amputation free survival rate) of the control group fell (it was unusually high in the PIIa read-out). As such it seems that Aastrom has to go it alone now. Also aggressive in the CLI space is Pluristem (PSTI), Aldagen (now part of Cytomedix: OTC/BB:CMXI) and even device company Thermogenesis (KOOL) announced CLI data from a trial in India. We believe that in CLI COGS (cost of goods sold) and the ability to retreat patients will be significant factors.

Aastrom (ASTM) fall in market cap appears over-done at this point but smart investors will wait for a financing to be completed before jumping in. Data is at least 2 years away so there is no rush. Ditto for the other CLI players. In terms of Cytomedix we are very concerned that the strategy is flawed as Aldagen's product (ALDH-br cells) look expensive to make and are in early stages behind Aastrom and Pluristem. Is Cytomedix funded for a phase II CLI program ?  Stay tuned.

Aldagen Finds a Home: CytoMedix Acquires for $16 MLN in Stock

CytoMedix (OTCBB: CMXI) is set to acquire Aldagen, which is a private company that has been shopped on the street for the past year after two failed IPO attempts.

This is a stock deal valued at aproximately $16 million. Aldagen shareholders will own 17% of CMXI and will be eligible for milestones of up to 20+ million in Cytomedix stock, (valued at $28.4 million based on Cytomedix's close of $1.40 on Wednesday, before the deal was announced).

The company utilizes an ALDH-br bone marrow cell that is selected. Aldagen has P1 data from a Critical Limb Ischemia trial that looks fine (all P1-CLI data looks pretty good). The company is also pursuing a stroke indication and is treating the first group of n=10 patients in a P1a/b safety/efficacy (hint) study that they hope will morph into a P2 trial.  As part of the terms of the deal Aldagen's VC are making a $5 mln investment in Cytomedix (CMXI).

Cytomedix's lead product is the AutoGel system which is marketed to produce platelet-rich plasma (PRP) gel derived from a patient's own blood for use on a variety of exuding wounds. We have not in detail evaluated this transaction, and there will be a call in the morning.

Daily Dose Early Read: CLI is getting competitive and Aastrom (ASTM) is in the lead in a  Phase 3 pivotal trial with replicel. Pluristem (PSTI) is right behind with their allogeneic PLX cells. PSTI will have the lowest cogs and we expect because of the enrichment step for Aldagen that they will have the highest COGS. We are therefore concerned that Aldagen is likely the third player to market and with the most expensive product. Can efficacy in CLI be dramatically different between these three players and can it be proven ? That is a big question and only time and science will answer it, but we expect the answer will be no. Stroke is even more complex, requires very large trials and Athersys is pursuing it with MultiStem (low COGS, allogeneic).  CYMX will pick up Aldagen, their manufacturing and operations folks and this will increase their fixed and variable costs.  Its hard to see given the price paid how this works for CytoMedix shareholders.

Transaction Terms: (from press release): At the closing, Cytomedix issued 135,398 newly designated Cytomedix Series E preferred shares to Aldagen shareholders. Pro forma for the conversion of these shares to common stock, as set forth in the designations documents for the Series E preferred stock, Aldagen shareholders will own approximately 17.3% of Cytomedix common shares outstanding after the concurrent conversion and/or redemption of all existing Cytomedix preferred shares.

There are also contingent clinical milestone payments totaling up to 20,309,723 shares, which will be issued to Aldagen shareholders upon the achievement of predetermined clinical milestones associated with an ongoing Aldagen Phase 2 trial in post-acute ischemic stroke. Notably, 80% of this contingent consideration is issuable only upon a favorable clinical efficacy signal in the above-mentioned trial. The costs of the clinical trial will be funded, in part, by the $5.0 million investment made by Aldagen shareholders, $3.0 million in proceeds from completed or committed warrant exercises by existing Cytomedix shareholders, as well as a portion of Cytomedix subject to lockup restrictions ranging from six to 18 months.

As part of the transaction, as of the closing date three Aldagen Board members have joined the Cytomedix Board, which has been expanded to nine seats. They are Richard Kent, M.D., Chairman of the Board of Aldagen, Lyle Hohnke, Ph.D., Aldagen Del Guercio, Managing Director of CNF Investments and a current Board Observer for Aldagen. Concurrent with these additions, Craig Mendelsohn has stepped down from the Cytomedix Board.

In addition, Edward L. Field, Aldagen Operating Officer of Cytomedix. Aldagen is now a wholly owned subsidiary of Cytomedix and will retain manufacturing and product development facilities in Durham, N.C.

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PluriStem (PSTI): All Systems are Go !

Pluristem Therapeutics (NASDAQ: PSTI) announced that following preliminary discussions with several governmental authorities, it will expand its research and development efforts on an acute radiation exposure treatment. The announcement comes as governments around the world have broadened their search for easily administered and effective radiation countermeasures.

Liat Flaishon, MD, PhD, recently appointed Pluristem's Director of Business Development, will lead the company's development efforts.

Dr. Flaishon joins Pluristem after serving as the director of Drug Safety Risk Management in the global drug safety and pharmacovigilance department at Teva Pharmaceuticals. Dr. Flaishon received her medical degree from the Sackler School of Medicine, Tel-Aviv University, and her PhD in Immunology from The Weizmann Institute of Science.

As previously announced, Pluristem's PLX cells have achieved favorable pre-clinical data in the treatment of radiation exposure. In studies conducted by Professor Raphael Gorodetsky and his team at the Biotechnology and Radiobiology Laboratory at the Sharett Institute of Oncology at Hadassah Medical Center in Jerusalem, Pluristem’s placental 3D expanded cells have demonstrated efficacy as mitigators of the acute radiation syndrome (ARS) following radiation exposure in animals that were given lethal doses of radiation and 24 hours later were treated with these cells. According to these studies’ findings, a statistically significant increased survival rate (3-4 fold) was observed in those animals treated with Pluristem’s cells over the untreated control animals. Additionally, bone marrow cellularity was significantly elevated following the administration of the placental cells throughout the follow-up period. These beneficial effects may be attributed to the cytoprotective effect and/or the immunomodulatory properties of PLX cells.

“Following announcement regarding our initial studies on radiation treatment, we have seen significant interest in our radiation product candidate”, said Zami Aberman, Chairman and CEO of Pluristem. "Currently, there is an extensive search for an easily administered and effective product for radiation countermeasures. We believe that our PLX cells have the potential to both extend the window of treatment for radiation victims and to become an off-the-shelf nuclear catastrophe countermeasure product."

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Daily Dose Conclusion: ARS (Acute Radiation Syndrome) is really three sub-syndromes but the standard of care for radiation exposure remains a bone marrow transplant. A rapid off the shelf allogeneic product is a perfect fit for this type of medical counter measure (MCM). 

Importantly the key drive for PSTI is progress in CLI (Critical Limb Ischemia).  REPORTS circulated yesterday that PSTI was looking to divest or exit the CLI indication. Those reports appear totally unfounded. While Aastrom (ASTM) has the most advanced therapy for CLI (now in P3) the COGS equation for an allogeneic product will give PSTI a great advantage versus ASTM.  So the key question will be autologous versus allogeneic, and all of the implications that accompany the two very different approaches such as cellular integration, the need and cost to re-treat and the efficacy of autologous versus allogeneic (placental derived) cells.

The answers clinically are not known yet but given the size of the opportunity there is room for more than one therapy.  We are hopeful that Aastrom has enough power (enough patients) to meet the primary endpoint (AFS – amputation free survival) and that will be positive for all the cell therapy companies.

ThermoGenesis ($KOOL) now in CLI ! (video)

ThermoGenesis Corp (NASDAQ: KOOL) press released an update on their Res-Q clinical evaluations:

ThermoGenesis Provides Update on Res-Q® Clinical Evaluations at Leading Stem Cell Therapy Conference

INITIAL DATA SHOW POSITIVE OUTCOMES IN TREATING CRITICAL LIMB ISCHEMIA AND LONG BONE FRACTURES

What is Res-Q ?  This is a point-of-care system designed for the preparation of cell concentrates, including stem cells, from bone marrow aspirates and whole blood for platelet rich plasma (PRP). The product is being tested in India in a trial co-sponsored by ThermoGenesis and Totipotent SC, the company's distributor for the Res-Q in India.

The trial has evaluated n=10 of n=15 planned patients with advanced CLI. Safety and AFS (limb salvage) at one year are being evaluated. Secondary endpoints such as ABI (ankle brachial index), six minute walk test, and resting pain are showing good results.

In addition a second trial is evaluating n=16 of n=20 patients with non-union or delayed union fracture of a long bone (tibia) who have undergone composite grafting with autologous bone marrow cell concentrate to evaluate the procedure's safety and effect on fracture healing. Long bone fractures represent an unmet medical need that the med tech companies have been chasing for years. So far the system has shown no intra-operative complications, and one non-device related adverse event. Of nine patients who are now out three-to-six months post-treatment, four have fractures that have united and four have experienced partial unions of the bone fracture which is quite hopeful.

Daily Dose Conclusion: Few are paying attention to KOOL as a therapeutic player in CLI or bone fractures and as a potential challenger to Cytori or even Aastrom or Pluristem in CLI. This is worth watching.

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MesoBlast ($MSB): FDA Green Lights PII Trial for Type 2 Diabetes

MesoBlast (ASX: MSB) press released FDA approval to move to a PII trial today. Recall that MSB's product is "allogeneic" (other people's cells) and as such is "off-the-shelf" ready. Similar to Athersys and PluriStem approaches. Diabetes is a large market and is often related to an auto-immune condition that results in damage to the insulin producing cells (islets of the pancreas).

The MesoBlast trial will be a randomized, placebo-controlled, 3 month trial that will evaluate a single IV injection of one of three (progressively higher doses of cells) in N=60 (Type II diabetes patients) who show elevated blood glucose levels. Animal data in this indication showed hints of activity. MesoBlast has demonstrated safety with their product in several prior trials.

Daily Dose Conclusion: MesoBlast recognizes that their cell therapy product may have multiple uses and multiple indications. MesoBlast had a BIG WIN when Cephalon invested in their therapy (since acquired by Teva). With that said the market cap of MesoBlast peaked back in November and has come down sharply (>40%) as investors have struggled with the high valuation. The cardiology data presented at AHA seemed to mark the peak. Valuations for Mesoblast versus other Allogeneic companies in the space such as Athersys and PluriStem are tough to understand.

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Geron versus PluriStem @ Seeking Alpha? That's the wrong question......

We saw an article at Seeking Alpha talking about Pluristem versus Geron. The PluriStem CEO does a compare and contrast. While PSTI CEO Zami makes some good points regarding market size, were not sure that any comparison to Geron makes any sense.

Allogeneic cells (other peoples cells) do fit the pills in a bottle model that Pharma craves but as we have heard Zami himself say at multiple conferences, these allogeneic cells (even though they are from a placenta) do not integrate long term to the host. Therefore the effect is likely moderate, and that may be fine depending on the indication.

CLI (Critical Limb Ischemia) itself is a very variable disease and PluriStem has Phase 1 data and is just beginning their Phase 2 trial. So its early days for sure. Aastrom is also pursuing CLI and now is in a Phase 3 trial. As we have said in the past we are hopeful that the results will be good for both companies but neither company has definitive data sets yet and the disease itself is very variable. As such investors can't be sure what the outcome of these trials might be. In the case of Aastrom the P2 first interim analysis looked great but the second did not (the amputation rate in the placebo group improved and narrowed the difference between active and control). CLI is a variable disease and this happens. Aastrom is smart, they expanded the P3 trial (made it larger), which gives them a greater chance of success but it also means it will be more expensive and probably take longer to complete.

We would push the concepts here back to basics and get away from a comparison between an off the shelf allogeneic cell that is targeting angiogenesis (new blood vessel formation), improving circulation versus an embryonic approach that it was hoped could repair damaged signal conduits (nerves), paralysis.

Rather we ask how did CLI patients become ill in the first place? Poor circulation, diabetes, and other co-morbidities are likely part of the problem. So while fixing circulation, locally, may stave off an amputation, it seems like it is not addressing the underlying cause. Why inject intra-muscular versus intra-arterial? Basic science questions such as dose, biological mechanism of action, clinical effect, even product variability remain issues with many of the institutional investors who are following these cell therapy companies.

We note that Biotech giant is Celgene (CELG) is also working on placental based cell therapy but here it is for down-regulation inflammation, in Crohns Disease for patients who have failed steroids. We also know that Athersys and Pfizer are pursuing this approach also with an allogeneic therapy (MultiStem). Proof of Concept from a Celgene or a Pfizer would be a big deal for all in the space.

We certainly believe that there is a role for allogeneic therapy as well as autologous and that indications should dictate, which therapy is best for which indication. The lower cost of goods and the multiple treatments likely for CLI do favor allogeneic players where the opposite is true in cardiovascular disease (heart attacks, CHF and cardiac ischemia). For example news today that Cytori has filed its Investigational Device Exemption (IDE) application to begin a clinical trial of the Celution® System for chronic myocardial ischemia (CMI). Cytori's ATHENA represents a device-based (Phase I/II) to investigate the use of autologous, clinical-grade adipose tissue (fat) derived stem and regenerative cells (ADRCs). This all happens at the patients point-of-care with Cytori’s Celution® System.

The institutional community evidenced by stock prices is not excited about CLI (long and expensive trials, variable disease), but granted, very much an unmet medical need. So while Geron's departure in the space is (was) a disappointment the clinical advances of other companies like MesoBlast, Athersys, Cytori, Aastrom, NeoStem, and yes PluriStem are positive.

In fact we are excited to see what happens with the work that PluriStem is doing with United Therapeutics in the COPD (airways) space.