Stem ($STEM) Reports the Q4: $13 Million left in the bank

Daily Dose Conclusion: STEM has some cash, enough to see operations through for the next year. The company remains one of the last standing pioneers in embryonic research. The spinal trial is exciting but its early days and the approval pathway isnt clear nor is it near term.  Great data from the trial is the "wildcard" here.

From the SEC Filings:  For the full year 2011, cash used in operations totaled $22 million. However, in the last six months of 2011, (which includes the effect of the reduction in force effected in the second quarter, cash used in operations was slightly less than $9 million).

At December 31, 2011, the Company's cash, cash equivalents and marketable debt securities totaled $16,592,000. In the first quarter of 2012, the Company has also received aggregate gross proceeds of approximately $1.4 million from the exercise of warrants and receipt of a licensing fee. Including these proceeds, the Company’s pro forma cash balance at December 31, 2011, would be approximately $18 million.

 SEC Filings: Fourth Quarter and Recent Business Highlights

Therapeutic Product Development

• In February 2011, the fourth and final patient in our Phase I clinical trial in Pelizaeus-Merzbacher Disease, was enrolled and transplanted with our proprietary HuCNS-SC® cells (purified human neural stem cells). This trial, which is being conducted at UCSF Benioff Children’s Hospital, is the first to evaluate neural stem cells as a potential treatment for a myelination disorder. 
• In March 2011, we initiated a Phase I/II clinical trial of our HuCNS-SC human neural stem cells in chronic spinal cord injury. The trial is expected to enroll a total of 12 patients who are three to 12 months post-injury, and will include patients with both complete and incomplete injuries as classified by the American Spinal Injury Association Impairment Scale (AIS). The trial was authorized by Swissmedic and is being conducted at the Balgrist University Hospital, University of Zurich, a world leading medical center for spinal cord injury and rehabilitation.
• In April 2011, we entered into a collaboration with Frank LaFerla, Ph.D., a world renowned leader in Alzheimer’s disease research, to study the therapeutic potential of our HuCNS-SC cells in Alzheimer’s disease. Dr. LaFerla’s published research has shown that mouse neural stem cells enhance memory in a mouse model of Alzheimer’s disease, and the goal of our collaboration is to replicate these results using our human neural stem cells.
• In June 2011, at the International Society for Stem Cell Research (ISSCR) 9th Annual Meeting, we presented evidence of engraftment, migration and the long-term survival of our HuCNS-SC cells following transplantation into patients with a severe neurological disorder. Importantly, the results show that the cells can persist following the cessation of immunosuppression. The data support our premise regarding the viability and utility of neural stem cell therapy as a potential treatment for a wide range of CNS disorders.
• In September 2011, the first patient in our Phase I/II clinical trial in chronic spinal cord injury was enrolled and successfully transplanted with our HuCNS-SC cells. This landmark clinical trial has a unique design, in which patients with progressively decreasing severity of injury will be treated in three sequential cohorts. The first patient has an injury classified as AIS A, with complete loss of sensation and mobility from the waist down.
• In November 2011, we reported that an interim review of one patient’s MRIs from our Phase I PMD trial showed changes consistent with the development of new myelin in the regions in which the HuCNS-SC cells were transplanted, and that the safety data suggest the procedure and cells have been well tolerated.
• In December 2011, we successfully completed the enrollment and dosing of the first cohort of patients in our Phase I/II clinical trial in chronic spinal cord injury. The first cohort of patients all have spinal cord injury classified as AIS A, the most severe level. We also announced that enrollment for the remainder of the trial, which will include patients classified as AIS B and AIS C, would be open to patients living in the United States and Canada.
• In January 2012, we published preclinical data demonstrating that our HuCNS-SC cells protect host photoreceptors and preserve vision in a well-established animal model of retinal disease. Moreover, the number of cone photoreceptors, which are responsible for central vision, remained constant over an extended period. The preclinical results are highly relevant to human disorders of vision loss, the most notable of which is dry age-related macular degeneration (AMD). The data was featured as the cover article in the February 2012 issue of the international peer-reviewed European Journal of Neuroscience.
• In January 2012, the U.S. Food and Drug Administration (FDA) authorized the initiation of a Phase I/II clinical trial of our HuCNS-SC cells in dry AMD, the most common form of AMD. AMD is the leading cause of vision loss and blindness in people over 55 years of age, and approximately 30 million people worldwide are afflicted with the disease. There are no approved treatments for dry AMD.
• In February 2012, the fourth and final patient in our Phase I PMD trial completed the twelve-month follow up and evaluations required by the trial protocol. Results of the trial will be reported at the European Leukodystrophy Association meeting to be held in Paris, France, March 31-April 1, 2012.

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Clevland Bio Labs ($CBLI): Moving beyond BioDefense

Cleveland Biolabs (CBLI): Company is looking at utility of CBLB502 in Cancer Patients:

• The rationale for the trial is based on preclinical studies indicating that CBLB502, (see background below) is a drug under development to reduce the risk of death following exposure to radiation. The compound may have direct anticancer properties when administered as a single agent. This was shown in a number of experimental tumor models in animals, particularly in metastatic nodules in the liver
• Cleveland BioLabs announced that the first patient completed an initial series of 5 doses in a Phase I trial evaluating CBLB502 in advanced cancer patients.
• The study will evaluate the safety and pharmacokinetic profile of CBLB502 in patients with advanced cancers.
• Up to 48 patients are expected to be enrolled in multiple cohorts to determine the safety, tolerability, and maximum tolerated dose of repeated administrations of CBLB502.
• Evaluations for evidence of anticancer activity of CBLB502 in advanced cancer patients will also be performed.

Background: The scientific foundation of Cleveland BioLabs’s product development efforts is based upon proprietary discoveries of the molecular mechanisms underlying a form of cell death called apoptosis. Apoptosis is a highly specific and tightly regulated form of cell death that can be initiated by a variety of external and internal stresses including exposure to radiation or toxic chemicals. For example, exposure to high doses of radiation is lethal due to massive cell loss through apoptosis in radiosensitive tissue such as the hematopoietic (HP) system and the gastrointestinal (GI) tract (“Acute Radiation Syndrome” (ARS)). In addition, apoptotic death of bystander non-tumor cells accounts for the dose-limiting toxicity of anti-cancer radio- and chemotherapy that affects more than 70% of patients. Apoptosis is also a major determinant of tissue damage caused by acute medical conditions involving ischemia (lack of sufficient blood flow) such as cerebral stroke, heart attack and acute renal failure. On the other hand, apoptosis can serve as a protective mechanism that allows the body to rid itself of defective cells, such as those that have gained malignant potential and would develop into tumors if not eliminated. Thus, strategic manipulation of apoptosis has a wide range of potential therapeutic applications.

Based upon research by the founder and Chief Scientific Officer of CBLI, Dr. Andrei Gudkov, we have developed novel proprietary strategies to target the molecular mechanisms controlling apoptotic cell death for therapeutic gain. These strategies exploit naturally occurring differences in the way tumor cells and normal cells respond to genotoxic (DNA-damage-inducing) stresses such as radiation. As illustrated in the Figure below, tumor cells are typically characterized by defects in stress-induced apoptotic pathways. Such defects frequently include inactivation of the p53 tumor suppressor and/or constitutive activation of NF-kappaB signaling. Thus, while normal cells undergo apoptosis in response to radiation, tumor cells die through other non-apoptotic pathways.

CBLI is focused on development of two general classes of apoptosis-modulating pharmaceuticals:

1. Protectans are compounds that block stress-induced apoptosis. Since the targeted pathway is typically only functional in normal cells, Protectans have the potential to specifically protect normal, but not tumor, cells from death in the face of stress. CBLI’s lead Protectan compounds, CBLB502 and CBLB600 Series, are optimized derivatives of microbial factors that are natural regulators of apoptosis. Our expectations for these rationally designed compounds have been borne out in extensive preclinical studies showing that Protectans rescue mammals exposed to lethal doses of radiation by protecting the vulnerable HP and/or GI systems. Protectans may be useful in counteracting the effects of radiation exposure in military, terrorist attack and nuclear accident settings, in protecting cancer patients from the negative side effects of radiation and chemotherapy, and in limiting ischemia-induced tissue damage. CBLI’s recent discovery that CBLB600 Series Protectans also regulate proliferation and mobilization of hematopoietic stem cells opens up another wide array of potential applications for these drugs.
2. Curaxins are small molecules designed to reactivate apoptotic pathways in tumor cells by simultaneously restoring p53 function and inhibiting NF-kappaB activity. Curaxins induce apoptosis in a broad range of human tumor cells, yet have no effect on normal cells. Curaxins also sensitize tumor cells to the apoptosis-inducing effects of other cancer treatments. Thus, Curaxins may be useful either as a monotherapy or as an adjuvant to other therapies for a number of human malignancies including renal cell carcinoma, hormone-refractory prostate cancer, soft-tissue sarcoma and myeloma. CBLI’s first generation Curaxin, CBLC102, has demonstrated safety and activity in a Phase II clinical trial in patients with hormone-refractory prostate cancer. In addition, CBLI has successfully identified a lead next generation Curaxin compounds that have demonstrated reliable anti-tumor effects in animal models of colon, breast, renal and prostate cancers. These next generation compounds have favorable pharmacological characteristics, are suitable for oral administration and demonstrate a complete lack of genotoxicity. They share all of the positive aspects of CBLC102, but significantly exceed the former compound’s activity and efficacy in pre-clinical tumor models. Development of the next generation compounds will be conducted through Incuron, a joint venture between CBLI and BioProcess Capital Ventures.

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Pluristem Begins Up Scaling Its PLX Cell Bioreactors - $PSTI

Scale Up of Bioreactors to Allow Production of About 30 Billion Cells With Each Reactor Run

Pluristem Therapeutics, Inc. (Nasdaq:PSTI - News) (TASE:PLTR) today announced that it has initiated the process of scaling up the Company's manufacturing bioreactors from their current size of 5 liter (L) to 15L. The up scaling process is being coordinated to go on-line as part of Pluristem's current plant expansion. With the completion of the scaling up process, Pluristem will be positioned to become the leading manufacturer of cells for a variety of product candidates.

The 15L bioreactors will accommodate the commercial production of Pluristem's PLacental eXpanded (PLX) cells that will be used in both the Company's upcoming pivotal Critical Limb Ischemia (CLI) clinical trial and the subsequent commercial sales of the cell product once approved.

Utilizing Pluristem's proprietary 3D manufacturing technology, a 15L bioreactor will yield approximately 30 billion PLX cells per reactor run, enough PLX cells for 100 doses at a dose of 300 million cells, the dose that will be used in the CLI clinical trial.

"The large-scale manufacturing of our PLX cells is vital to the success of our clinical trials and subsequently important for the potential commercialization of our PLX products," said Zami Aberman, Chairman and CEO of Pluristem. "Today, we initiated an additional important step in our industrialization process, where we utilize our proprietary 3D production technology, in order to manufacture trillions of cells in a stable, fully controlled and cost effective manufacturing operation. I believe that these competitive advantages strongly position us to provide viable therapies to millions of patients around the world once our products are fully developed and approved."

Daily Dose Conclusion: PluriStem many not be as far way from starting the Phase II CLI trial as was implied from the quarterly CEO's letter that seemed to say that new production for the trial would come from the new plant which is being done at commercial scale. Our biad remains positive on PSTI.

About Pluristem Therapeutics

Pluristem Therapeutics Inc. (Nasdaq:PSTI - News) (TASE:PLTR) is a leading developer of placenta-based cell therapies. The company's patented PLX (PLacental eXpanded) cells drug delivery platform releases a cocktail of therapeutic proteins in response to a variety of local and systemic inflammatory diseases. PLX cells are grown using the company's proprietary 3D micro-environmental technology and are an off-the-shelf product that requires no tissue matching or immune-suppression treatment prior to administration. The PLX-PAD comprehensive clinical development plan has been recognized by both the EMA and FDA, targeting a sub-population of 20 million patients in the Peripheral Artery Disease (PAD) market.

Data from two Phase I clinical trials indicate that Pluristem's first PLX product, PLX-PAD, is safe and potentially effective for the treatment of end stage PAD. Pluristem's pre-clinical animal models have demonstrated PLX cells are also potentially effective in nerve pain and muscle damage when administered locally and in inflammatory bowel disease, MS and stroke when administered systemically.

Pluristem has a strong patent portfolio, company-owned GMP certified manufacturing and research facilities, strategic relationships with major research institutions and a seasoned management team. For more information visit www.pluristem.com, the content of which is not part of this press release. Follow Pluristem on Twitter @Pluristem.

CLICK HERE to watch a video where CLI patients and doctors involved with the clinical trials share their stories. CLICK HERE to see Pluristem's cell therapy product animation on YouTube.

ImmunoCellular ($IMUC): ImmunoCellular Therapeutics says its method for manufacturing ICT-107 has demonstrated meaningfully enhanced efficiency, consistency and convenience

• ImmunoCellular announced that its proprietary method for manufacturing ICT-107, its lead dendritic cell (DC) based vaccine for the treatment of glioblastoma multiforme (GBM), has demonstrated meaningfully enhanced efficiency, consistency and convenience, compared to other methods for producing DC-based immunotherapies.
• The manufacturing method employs a closed-bag system designed to produce highly potent DCs from white blood cells (WBCs) collected from patients, and for subsequently cryopreserving the DCs for future vaccine treatments.
• The process has also been optimized to produce high levels of certain cytokines that play a key role in initiating immune response.
• Despite variability in cell compositions collected from various patients, the product consistently met the purity and viability criteria reviewed by the FDA.

The final manufacturing process is not expected to require significant changes prior to eventual commercialization.  IMUC is working with Progenitor Cell Therapy (PCT) / NeoStem (NBS) for manufacturing.

Daily Dose Conclusion: IMUC looks like a compelling value given the phase 1 data, the manufacturing and the progress the company has made this year. We also like the fact that IMUC did raise capital earlier this year too.

Lazard Capital Markets initiates coverage of $VSTM with "Buy" Rating, $20 price target

Verastem, Inc. (NASDAQ:VSTM) is a biopharmaceutical company focused on discovering and developing novel drugs that selectively target cancer stem cells. Cancer stem cells are an underlying cause of tumor recurrence and metastasis. Verastem is translating discoveries in cancer stem cell research into new medicines for the treatment of major cancers such as breast cancer.

Last week, Lazard Capital Markets initiated coverage of Verastem with a "Buy" rating and a $20 price target. 

Highlights of the report are as follows:

• We believe VSTM shares will appeal to investors by virtue of the company’s world-class scientific founders, highly experienced management team and a research focus that may possess the potential to dramatically change the manner in which cancer is treated. 
• Targeting CSCs could improve treatment outcomes. Verastem is pioneering the development of therapies that target cancer stem cells (CSCs). Emerging evidence suggests that, while standard cancer treatments may be effective at killing cancer non-stem cells, CSCs may survive, providing opportunities for re-growth. 
• Technology platform designed to provide steady supply of CSCs. Verastem’s proprietary technology platform allows for the production of stable CSCs. Identification of potent CSC-killing agents may be facilitated through standard high-throughput screening techniques.  
• VS-507 likely first in man for treating TNBC. Human testing of lead drug candidate VS-507 is expected to begin in 2012. A modulator of the Wnt signaling pathway, VS-507 will initially be tested for treating triple-negative breast cancer (TNBC). 
• Valuation and risks. Our $20 PT is derived from a DCF analysis that values VS-507 for treating TNBC. Risks include successful development and regulatory approval of drug candidates as well as market competition. 

Read the full report below. 

Initiating Coverage on Verastem - March 2012

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Osiris ($OSIR): Prochymal widely exepcted to Fail in Canada (Lazrad Report)

Osiris (NASDAQ: OSIR): Lazard analyst lowers the rating to sell this morning and declared that rejection of Prochymal in Canada is likely.

The summary of the analysts note follows:

• We (analayst at Lazard) expect a negative decision by Health Canada to significantly impact shares; Chondrogen development stalls. We expect to see a near-term decision rejecting the approval of Prochymal by Health Canada, based on its failure to reach the primary endpoint in two Phase III trials and its first-in-class status as an experimental stem cell therapy. As such, we believe this will increase the regulatory hurdle for approval. In addition we anticipate negative results from the ongoing confirmatory GvHD trial, and believe that, at the very least, interpretation of efficacy data will be muddled by the enrollment pause, elimination of one dosing arm, clinical site restriction, and statistical repowering. Recall, OSIR is in discussions with Sanofi/Genzyme on the abrupt termination of the Prochymal collaboration. Regarding Chondrogen, management indicated that clinical development has been put on hold pending an internal decision on the program.
• Recently OSIR reported 4Q EPS of $0.15, above our $0.07 estimate - delta due to lower operating expenses vs. our forecast. Revenue of $11.0 M was slightly above our $10.9 M estimate, while operating expenses of $5.7 M were lower than our projection of $8.3 M. We introduce our 2012 quarterly estimates and slightly increase our revenue outlook based on OSIR’s biosurgery business, while decreasing our operating expense estimates based on prudent cost management. We continue to anticipate a ramp-up in expenses to fund ongoing clinical trials and expansion of the company’s commercial infrastructure. With regards to revenue, we note that the $130M upfront payment received from the Genzyme collaboration will be fully amortized in 2012, and we do not model additional partnership funding or milestone payments for Prochymal. Given the company’s current cash position of $47M, we delay our expectation for an equity raise until 2013 (from our previous 2012 expectation). However, we still expect OSIR will need additional funds to complete the ongoing GvHD trial and fund development in other indications.
• Maintain SELL rating and $2 price target. Our 12-month price target of $2 is based on cash per share as of 4Q13, inclusive of an equity raise. We value OSIR based on cash, as we do not believe its main value driver (Prochymal) will ever receive approval or generate sales. Risks include positive data on Prochymal or Grafix, which could drive the shares higher.

Daily Dose Conclusion: Osiris appears to be backing away from systemic use of allogenenic cells and focusing more on local adminastration (burns, bone healing), "pharmaco-surgery" platform. We would be on the sidelines for now.

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The clock is ticking on Provenge; Dendreon Corp. ($DNDN)

Dendreon Corp. (NASDAQ:DNDN) is a biotechnology company focused on targeting cancer and transforming lives through the discovery, development, commercialization, and manufacturing of novel therapeutics that may significantly improve cancer treatment options for patients. Dendreon's first product, PROVENGE® (sipuleucel-T), is the first autologous cellular immunotherapy to receive FDA approval for the treatment of asymptomatic or minimally symptomatic metastatic castrate resistant prostate cancer. 

A North America Equity Research report by JP Morgan released last week evalutes the impact of the Independent Data Monitoring Committee's unanimous recommendation to unblind "the Phase 3 trial of Zytiga in pre-chemo metastatic castration-resistant prostate cancer (mCRPC) patients – the market currently served by DNDN’s Provenge." 

The report states:

"Ultimately we believe CRPC patients are likely to receive several drugs (including DNDN’s Provenge and JNJ’s Zytiga) during the course of their disease (as none of them are “cures”) and note that DNDN is currently conducting a sequencing trial with Provenge and Zytiga (data expected later this year). Today’s news doesn’t impact our valuation as this development was already built into our assumptions. While our overall view is unchanged, we believe the clock is ticking on DNDN to cement use of Provenge into CRPC treatment practice before approval of other drugs in the pre-chemo setting."

Read the full report below. 

JP Morgan Dendreon Report

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FDA Declared Support for a New AntioBiotic Pathway - Positive for Companies like PolyMedix ($PYMX)

News from the FDA which declared its oprganizational support for a new pathway for review and approval of drugs to treat infections that are not susceptible to existing drugs said Janet Woodcock, director of FDA's Center for Drug Evaluation and Research. The new pathway was proposed by the Infectious Diseases Society of America in a statement submitted to the House Energy and Commerce Committee's health subcommittee. Under the proposal, products designated as "Special Population Limited Medical Use Drugs" could be studied in abbreviated clinical trials for specific populations, such as patients with drug-resistant infections, and measures would be taken to limit off-label use.

Speaking at a health subcommittee hearing Thursday, Woodcock also endorsed the goals of the Faster Access to Specialized Treatments (FAST) Act, which seeks to expand FDA's use of accelerated approvals. She said legislation instructing FDA to establish a new pathway for reviewing breakthrough drugs would be "helpful".

Daily Dose Conclusion: This news is positive for names like Polymedix (PYMX).

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