Phase I Results
It was PLX-PAD’s Phase I results that were used as a basis of acceptance into the European Adaptive Pathways project and the Japanese accelerated pathways. In one of its most encouraging trials in CLI, there were zero cases of limb amputations or deaths during the 12-month follow‑up period after administration of these cells. Time to amputation or death was the primary endpoint in Sanofi’s pivotal trial as well, and the trial showed no statistical difference from placebo. A concurrent Pluristem European Phase I trial conducted in Germany showed a 73% amputation-free survival rate after 12 months, still higher than standard of care. If the two pivotal trials to be conducted can replicate these results, we are looking at a potentially blockbuster treatment for a $12 billion disease with no other treatment on the market other than manual surgical revascularization – essentially bypass or angioplasty surgery in the legs.
While Sanofi and NV1FGF have taught us to be cautious here, it is hard to discount these Phase I results entirely, together with the favorability Pluristem has enjoyed from regulatory authorities across the globe of late. It certainly makes sense to be cautious, but coasting along historic lows does not seem warranted given positive developments.
An Unmet Need
CLI may not sound as dreadful as a terminal disease like cancer for example, but the fact is that the mortality rate at 5 years post diagnosis is 50%, and 70% at ten years. From this perspective, CLI is practically a terminal condition at this point. It is an effect of general cardiovascular disease exacerbated by smoking and poorly-controlled diabetes. 53% of patients in Sanofi’s Phase III study were diabetics, and 47% had a history of coronary artery disease.
Extra $8M Further Pads Pluristem’s Balance Sheet
Prior to this grant by Horizons 2020, Pluristem already had about $40 million in cash and liquid assets. The grant brings the total to $48 million with an average quarterly burn rate of $5.6 million across the last four quarters. This gives them about two and a half years running room. The trials in both Japan and the dual pivotal trial in Europe and the U.S. are expected to be completed by 2018, and with enough cash to get there, it’s now only a question of whether Phase I results can be replicated in these trials. If they can, getting more cash will not be a problem.
The main risk, of course, is that they won’t be replicated, as happened to Sanofi SA (ADR) (NYSE:SNY). This is a legitimate worry for investors, but even so, does not seem to justify Pluristem being close to its lows with the amount of liquidity currently at its disposal and the array of regulatory perquisites it has received since last year in CLI. With liquidity at 40% of market cap, it does seem like the successes the company has had these last 15 months warrant more than a $76 million valuation excluding cash, especially considering the size of the CLI global market at $12 billion with virtually no competition.
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Note: This article is written by David Rich and originally published at Market Exclusive.
