CurrentRating:MarketOutperformSummaryandBasisofRating:We are initiating research coverage of PluristemTherapeutics, Inc (PSTI) with a Market Outperformrating and a 12‐month price target of $3.00 per share,however much higher longer‐term targets can beenvisioned. As standardized cell therapies continue torepresentanextremelypromisingsectorofthehealthcarefield,Pluristemhaspatenteda scalable3Dtechnologyforthe development andmanufacturing of standardized celltherapies derived from the human placenta that couldmake this Company a leader in this field. Although theCompanyhasanextensiveproductpipelinethataddressesa variety of clinical indicationswith potentialmarkets ofseveral billion dollars, the near‐term focus is onestablishing its technology as a go‐to platform in celltherapeutics. We believe that as Pluristem establishescollaborations with major health care companies andresearch facilities for the use of its technology as aplatform, the shares will come to reflect the value andpotential of this Company’s patented, intellectualproperty.This early clinical‐stage bio‐therapeutics companyextractsadherentstromalcells(ASCs)derivedfromafter‐birthplacenta fromadultdonorsunrelated to the patient(allogeneic). All ASCs are mesenchymal‐like (with the
sameabilitytosupportavarietyofcelltypes),multipotentadultstemcellsthatarederivedfromtheplacentaorother functioning organs. Since ASCs have the ability to generate supporting cells, such as those found incartilage,bone,muscle,tendon,ligament,andfat,theyhavethepotentialtoreplacedamagedtissuesubsequenttoexpansionandtransplantationtoaninjuredsite.Following extraction of ASCs from placenta, Pluristem expands them in its proprietary PluriXTM three‐dimensionalbioreactor,whichimitatesthenaturalmicrostructureofbonemarrow.TheCompanybelievesthatASCsexpandedinthismanner(calledPLXcells)arereadilyavailableforthetreatmentofavarietyofdiseases,andsincetheydonotderivefromapatientforhis/herowntreatment,theycanbeusedbyanypatient.CorporateHistory
PluristemTherapeuticswasincorporatedinNevadaandcommencedoperationsonMay11,2001.Pluristem'sheadquarters, research and development, and Good Manufacturing Practices (cGMP)‐approved cellmanufacturing facilities are located in Haifa, Israel. The Companyhas awholly owned subsidiary, PluristemLtd., which is incorporated under the laws of Israel. In 2007, PSTI acquired all the patents related to its
PluristemTherapeutics,Inc(PSTI)
SUMMARYSymbol PSTICurrent Price 1.47$ Target 3.00$ Fiscal Year June
Revenue* (in thous.) EPS (Loss)2009 $1,651 (0.63)$ 2010 $1,822 (0.44)$
2011E $2,500 (0.22)$
Balance Sheet Statistics (in thous.)As of: June 30, 2010
Cash & Equivalents 1,583$ Working Capital 2,324$ Long-Term Liab. 1,641$ Shareholders' Equity 3,981$ Book Value Per Share 0.14$
Shares Out. (in thous.) 20,910 Insider Ownership 18.67%Institutional Ownership 1.80%Market Cap (in thous.) 30,738$ 52-Week Range $0.82-$1.75Avg Daily Trading Vol. 94,288
PluriX™,Pluristem'spatentedbioreactor,emulatesbonemarrowenvironmentandpromotesrapidexpansionofstemcellswithouttheuseofgrowthfactors,cytokinesandotherexogenousmaterials.Thebioreactorcreatesathree‐dimensional microenvironment of stromal cell cultures and substrates that closely resembles thestructureandfunctionofthebody’sbonemarrow. Itiswithinthisartificialenvironmentthatstemcellsgrowand reproduce as they would in living organs, unlike in conventional two‐dimensional culturing methods.BecausethesizeandscaleofthePluriX™Bioreactorislargerthanthatofhumanbonemarrow,largerquantitiesofexpandedstemcellscanbeproduced.
Pluristem’s PLX cells are being developed as allogeneic (non‐personalized) therapeutic products. Pluristemretrieves adherent stromal cells (ASCs) from the placenta (obtained after birth), a non‐controversial, non‐embryonic, adult stem cell source. These cells are then placed in PSTI’s PluriX™ Bioreactor along withappropriate stromal cell cultures and substrates. The bioreactor expands these cells over several weeks atwhichtimetheASCsareseparatedfromthecultureandareknownasPLacentaleXpanded(PLX)cells. ThesePLX cells are stored “ready to use” for subsequent shipment to hospitals or clinics for use as a primary oradjuvantcellulartherapy.PLX cells have been found to possess favorable characteristics that Pluristembelieveswill allow them to beusedinthetreatmentofavarietyofdisorders.BoththeCompanyandindependentresearchershavefoundPLXcellstopossessimmunomodulatorycharacteristicsthatsuggestthesecellsarenotonlyimmuno‐privilegedbutalsoimmunosuppressive.Forexample,whencomparedtostemcellsderivedfrombonemarrow,PLXcellshavebeendemonstratedtopreventtheproliferationofpro‐inflammatorycells,todown‐regulatepro‐inflammatorycytokines,andtoenhancetheproductionofanti‐inflammatorycytokines.The Company expects that these favorable immunological qualities could help prevent and even treat therejection reactions that often occur with transplantation, including the prevention or treatment of cellulartransplantation reactions such as Graft‐versus‐HostDisease. Additionally, Pluristemhas evidence to suggestthat PLX cells may exert their effects through paracrine mechanisms, thereby supplying the necessaryenvironmentforahosttissuetorepairitselfwithoutexcessivescartissueformation.
• PLX cells are the result of no more than 20 doublings. Studies indicate that problems develop whendoublingMSCstoomanytimes.PluristembelievesthismaybeonereasonwhythesecretionofangiogenicgrowthfactorsbyPLXcellsisincreasedwhenPLXcellsareplacedinthehypoxicenvironmentversusbonemarrow‐derivedMSCswhere the secretion of those angiogenic factors is decreasedwhenbonemarrow‐derivedMSCsareplacedinhypoxicconditions.
• Pluristem’s3Dbioreactorexpansiontechnologyallowscellstobeexpandedextremelycost‐effectively.One75‐literBioreactor isequivalent toapproximately20,000 tissueculture flasks (175milliliters). PluristemalreadymanufacturesPLXata costofapproximately$1/millionPLXcells. When theCompanyscalesup,and assuming a treatment course/patient consists of 300 million cells, Pluristem will be able to supplyapproximately 40,000 patients from one placenta (see Figure 3). This translates into gross margins onproduct exceeding 90%, assuming a conservative sales price. This does not take into account that theplacentalprocurementissufficientlyinexpensivethattheCompanyisabletodiscardplacentasthatdonotmeetquality‐screeningstandards.
Inaddition,PluristembelievesthattheirPLXcellsbehaveasadrugdeliveryplatformtechnology.Pluristemhasperformed experiments and clinical trials documenting that PLX cells can be given off‐the‐shelf, withoutneedingtofollowamatchingprocedure.Afteradministrationthecellshavebeenshowntosecreteamixtureofanti‐inflammatory and angiogenic cytokines resulting in a statistically significant number of new capillaries(neovascularity).ThePLXcellsthendisappearinamatterofweeks.
Table1.Pluristem’sCurrentPLXScaleUpCapabilities
Current Manufacturing Capacity
One Placenta: 1-1.5x109 MSC’sOne placenta can seed up to 10 bioreactors with 30 gr FibraCel® disks
One BIOFLO 310 capacity is 1.5 L (working volume)
One PLX batch can treat:
Up to 50 PAD patients
Up to 50 BMT patients
Scale-up Manufacturing Potential
One Placenta: up to 3x109 MSC’s
Current bioreactor – up to 50 gr FibraCel® disks
Vessel scale up using current console – 14 L (working volume)
Elongation of bioreactor growth phase – Increased PDL’sOne PLX batch can treat:
Up to 1500 PAD patients
Up to 1500 BMT patients Source: Pluristem Therapeutics
Pluristem’s initial clinical focus is peripheral artery disease (PAD), including critical limb ischemia (CLI) andmoderate‐to‐severeclaudication.AdministeringtheCompany’sPXLcellsintramuscularly(IM)toPADpatientsin itsproof‐of‐concept trialhasyieldedpromisingresults. TheCompanycurrentlyreportedhearteningthree‐monthdatafromthesePhaseIclinicaltrialsintheUnitedStatesandGermany,whicharediscussedbelow.Pluristem is also developing other allogeneic cell therapy products using its PLX cells for the treatment ofvarious severe degenerative, ischemic, and autoimmune disorders. Pluristem’s current pipeline of PLX pre‐clinicalproductsisexpectedtobeadministeredintramuscularlyandaddressesthefollowingindications:• Inflammatoryboweldisease
Peripheral vascular disease affects about ten million people in the United States, most often people over 50yearsoldandpeoplewithdiabetes,dyslipidemia,orpeoplewhosmoke. Peripheralvasculardiseasereferstoany disease or disorder of the circulatory system outside of the brain and heart although it often is usedsynonymouslywithperipheralarterydisease,sinceperipheralvasculardiseaseisthemostcommondiseaseofthearteries.PAD results from arteriosclerosis – the laying down of fatty material mixing with other intracellularcomponents within the arteries, which causes increasing narrowing or weakening of the vessels. When anartery is blocked or narrowed, the part of the body supplied by that artery receives insufficient blood andoxygen,otherwiseknownasischemia.PAD can cause a host of symptoms depending on which organ system is affected. If it is not reversed, theaffected body part may eventually become gangrenous and die. Early signs of PAD are tight, aching, orsqueezing pain in the calf, thigh, or buttock (known as intermittent claudication), usually brought on bywalking;howeversomepatientsexperiencenoearlysymptoms.AsPADworsens,patientsmayexperiencelegpain at rest, aswellas symptomsofnumbness, slowlyhealingsores,andbalanceproblems. If thedisease isallowed to progress without treatment, Critical Limb Ischemia results with intensified symptoms includingulcersonthefeetortoesand/organgreneinfection. CLI isamajorhealthproblem,andifuntreated,patientsoftenrequiresurgicalrevascularizationoflimbsor,ultimately,amputation.UnmetMedicalNeed
IntheU.S., thereisa significantunmetmedicalneedforamedically‐effectiveandcost‐effective treatmentforCLIandmoderate—severeclaudication.TheCompanyapproximatesthatovereightmillionpeopleintheU.S.sufferfromthesetwoconditionsandthatthecostofsurgicaltreatmentapproaches$19billionannuallyintheU.S., based on inpatient hospital charges. Current therapeutic approaches have proven ineffective formanysevere limb ischemic situations. Pluristem believes its PLX‐PAD is a viable alternative and potentially cost‐effectivetreatment,andthattheearlyPLX‐PADclinicaldataareextremelyencouraging.AdvancesforPluristem’sPLXPAD
On September 14, 2010 Pluristem reported that data from its “first‐in‐man” clinical trials, begun in 2009,indicate that its placenta‐derived cell therapy, PLX‐PAD, appears to be safe and improves objective andsubjectivemeasurementsinpatientswithCriticalLimbIschemia,theend‐stageofPeripheralArteryDisease.The three‐month follow‐upreport evaluated theexperiencesof21patientswithCLI in twoopen‐label,dose‐escalation,Phase I clinical trials conducted inparallelatDukeUniversityMedicalCenter,StanfordUniversityMedicalCenter,TheCenterforTherapeuticAngiogenesisinBirmingham,Alabama,andSt.FranziskusHospital(supportedbytheCharité‐UniversityMedicineBerlin).TheCompanyexpectsthatthelaststudypatientwillbe enrolled on or about October 4, 2010 and that, following evaluation of all three‐month data, a completeanalysisofall27studypatientswillbeavailableattheendofthefirstquarterof2011.The studieswere designed to evaluate the safety of PLX‐PADat five escalating doses and included accessingeachpatient’s immunological profilebefore and after the local, intramuscularadministrationofPLX‐PAD. Inaddition,efficacyparameterswereassessedateachdoseofPLX‐PAD.
Notreatment‐relatedadverseeventswerereported.OnemajoramputationwasreportedinthePLX‐PADhigh‐dosegroupandwasdeterminedby thetreatingphysiciannottoberelatedtotheadministrationofPLX‐PADcells. This occurrence represents 4.7% of all patients treated in this study (compared with historical dataindicating a 35‐40% incidence ofmajor amputation in CLI patients per year). No significant adverse eventsdeemedcausallyrelatedtotheadministrationofPLX‐PADwerereported.NoneofthepatientsdevelopedanadverseimmunologicalprofilefollowingPLX‐PADadministration,indicatingthatPLX‐PADcellsareimmune‐competentandmaybeadministered“off‐the‐shelf”withoutneedformatching.Immunological profiles demonstrated a rise in anti‐inflammatory and angiogenic protein secretion followingdosingsuggestingthatPLX‐PADcellsmayactbydeliveringappropriatetherapeuticproteinsinresponsetotheischemic,inflammatoryprocessofCLI.Efficacywas studied in all 21 patients across all doses. Statistically significant improvements from baselinewereseeninthefollowingparameters:• Ankle‐brachialindex(ameasureofbloodflow)attheintermediatedose(p=0.033).
• Tissue oxygenation in the subset of patients treated in the European study where the distribution ofinjectionswashigher(p=0.05).
• Qualityoflifeasmeasuredwithavalidatedassessment(p<0.001).FindingsfromthissmallpopulationsuggestthatPLX‐PADmaybesafeandeffectiveforthetreatmentofCLI.InadditionsignalswereseentoindicatethatPLXmightbeeffectivetherapyforotherpainsyndromesincludingneuropathicpainassociatedwithHerpesZoster(shingles).ThesehearteningdataatfivedifferentdoselevelshaveenabledPluristemtoselectthetargettreatmentdoseofPLX‐PADforplannedPhaseIIstudiesfocusedonthecelltherapy’sefficacy.TheCompanyisincommunicationwithboththeU.S.FoodandDrugAdministration(FDA)andEuropeanMedicinesAgency(EMA)regardingthedesignofanoptimalmultinationalstudythatwillsupportanapprovalformarketingPLX‐PADforthetreatmentofCLI. TheCompanybelievesitwillbeabletobegin their internationalPhaseIIclinicaltrialduring thefirstquarterof2011.RecentDevelopments
RegulatoryandGrantsUpdate
Pluristem announced on June 28, 2010, that following its meeting with the Paul Ehrlich Institute (PEI), theGermanregulatoryauthorityforadvancedtherapyproducts(ATP),theCompanyisadvancingtowarddesigningtwoPhase IIb clinical trials for itsplacenta‐derivedcell therapyproduct,PLX‐PAD, to further evaluate safetyandefficacyinthetreatmentofCriticalLimbIschemiaandmoderate‐severeclaudication.The Office of the Chief Scientist (OCS) at the Ministry of Industry, Trade and Labor of Israel has supportedPluristem’sactivityforthepastfouryears.TheCompany’sapplicationforafifthyear’sgrantwasapprovedinanamountof$2.5millionforparticipationinR&DexpensesfortheperiodMarch2010 toFebruary2011. Inaddition the European authorities approved a research grant under the European Commission’s SeventhFrameworkProgram(FP7)intheamountofapproximately$150,000foraperiodoffiveyears.
PluristemannouncedonAugust30,2010thatitsPLXcelltherapyproductwasselectedastheonlycelltherapyproductcandidatetoenterintoastudyevaluatingtreatmentstopreventordelaythedevelopmentofdiastolicheartfailure(DHF)intheEuropeanCommission’sSeventhFrameworkProgram(FP7).This studywill test the effects of PLX cells on various heart cell types under high‐glucose conditions. Theseconditionswill mimic uncontrolled high‐glucose levels in type 2 diabetes patients that can lead to oxidativestressintheheartresultingindiastolicheartfailure(DHF).Approximately15millionpeopleworldwidesufferfromDHFatacurrenttreatmentcostexceeding$39billionintheU.S.alone.TheStudyconsortiumconsistsof19partnersfrom12countries. Itsobjectiveisto investigatehowmetabolicderangementscontribute toDHF,howdiagnosticalgorithmsforDHFcanbeimprovedbyassessingmetabolicrisk,andhowthecorrectionofmetabolicriskorofmetabolicrisk‐inducedcardiacabnormalitiescanopennewtherapeuticperspectivesforDHF.TheCompanybelievesthisDHFstudyisfurtherverificationoftheuniquenessofitsPLXcellsasanoff‐the‐shelfproductthatrequiresnotissuematchingpriortoadministration.Pluristemhasreceivedafive‐year$150,000grantfromtheFP7tocoverstudyrelatedR&Dexpenses.PossibleUseofPLXCellsforScreeningNewMedicines
Pluristem is in discussionwith several pharmaceutical companies regarding the possible use of PLX cells toscreenforpotential safetyandefficacysignalsfrommedicinesunderdevelopmentprior tohumantesting. Inrelated news, Bloomberg Businessweek reported on September 23, 2010 that researchers at majorpharmaceuticalcompaniesareinvestigatingthepossibilityofusinghumantissuecreatedfrompluripotentstemcells for the early identification of possible efficacy and potentially dangerous adverse drug events. Theadvantages of using human tissue grown from stem cells that can mimic the body's reaction to medicinesappeartobetwofold: 1)detectionofefficacyand toxicitysignalsprior toadministrationofmedicinesunderdevelopment would increase safety to study subjects; and 2) early detection of toxicity would also savepharmaceuticalcompaniestimeandfundsbyallowingthemtoterminateanunpromisingdrugprogrampriorto expensive clinical testing. Pluristem has not released the names of the companies with whom it is indiscussion.OptionsExercised
TheJuly7,2009announcementbyPluristemoftheenrollmentofthefirstpatientintoitsPhaseIclinicaltrialofPLX‐PAD triggered the exercising of options to purchase additional shares and warrants. In July 2009,1,058,708sharesofcommonstockatapurchasepriceof$0.75pershare (foranaggregatepurchasepriceof$794,000)andwarrants to purchaseup toan additional 1,058,708shares of commonstockwithan exercisepriceof$1.50persharewerepurchased.Thewarrantsareexercisableforaperiodof4.5yearscommencingsixmonthsfollowingissuance.OnOctober 12, 2009, certain institutional investors purchased2,702,822 shares of common stock (at $1.12)andwarrants (at $1.60) to purchase 1,081,129 shares of common stock. Thewarrants are exercisable for aperiod of five years commencing six months following issuance. The gross proceeds the Company receivedfromthisofferingapproximated$3.03million;cashcostsrelatedtothisplacementtotaled$242,000.
OnApril 27, 2010, Pluristem closed a private placementwhich sold to certain investors 2,393,329 shares ofunregisteredcommonstockandwarrantstopurchase717,999sharesofcommonstockand717,999sharesofcommonstock,atexercisepricespershareof$1.25and$1.40,respectively.Theaggregategrossproceedsfromthesaleof thecommonstockand thewarrantswere$2.68million. Thewarrantsareexercisablesixmonthsfollowingissuance thereof, foraperiodof2.5yearsthereafterforthe$1.25warrantsandthe$1.40warrants,respectively.Fiscal2010FinancialResults
Researchanddevelopmentcosts(lessparticipationbytheOCS)fortheyearendedJune30,2010increasedby37%to$4.30millionfrom$3.14millionfortheyearendedJune30,2009.ThisincreasewasattributabletotheCompany’sincreasedR&DactivitysupportingitsPhaseIclinicaltrialsinGermanyandtheU.S.,andpreparationforthePhaseIIclinical trials. Pluristemadded14newemployeesandbuiltanewresearchlabover thepastyear. The participation of the OCS increased from $1.65 million for the year ended June 30, 2009 to $1.82million for the current year. Pluristem estimates cash R&D gross costs (before deducting any governmentgrants)willbeapproximately$5millionoverthecomingyeartosupportitsresearchoperationsincludingtheupgradingofits3‐Dbioreactoroperations.Generalandadministrativeexpensesforthecurrentyeardecreasedby8%to$3.14millionfrom$3.42millionfor the prior year. The Company attributes the decrease to a reduction in stock‐based compensation toemployees.PluristemestimatesG&Aexpensesatapproximately$2.00millionforthecomingyear.Financialexpensesdecreasedfrom$78,000fortheyearendedJune30,2009to$14,000fortheyearendedJune30,2010,attributabletoalossfromthesaleofmarketablesecuritiesandtoexchangerateadjustments.Netlossforthecurrentyearwas$7.45millioncomparedto$6.64millionfortheprioryear.NetlosspersharefortheyearendedJune30,2010was$0.44,comparedto$0.63fortheyearendedJune30,2009,resultingfromtheincreaseinweightedaveragenumberofsharesduetotheissuanceofadditionalsharessinceJuly1,2009.September2010QuarterFinancialResults
Research and development costs (less participation by the OCS) for the quarter ended September 30, 2010increasedby15%to$998,000from$867,000intheyearearlierperiod.Theincreaseisattributedtosalariesandbenefitsexpensesasaresultofhiring11newemployeestosupportclinicaltrialsactivitysinceSeptember2009.General and administrative expenses for the quarter decreased by 2% to $770,000 from $756,000 in theSeptember2009quarter.Financial income increased from$20,000 in the September 2009quarter to $65,000 in the September 2010quarterduetoexchangerateadjustments.Thenetlossforthequarterwas$1.69millioncomparedto$1.62millionintheyearearlierperiod.NetlosspersharefortheSeptember2010quarterwas$0.08,ascomparedto$0.11ayearearlier. Thenet losspersharedecreasedasaresultoftheincreaseintheweightedaveragenumberofsharesfollowingissuancesofadditionalsharessinceSeptember30,2009.
Revenue (Participation from the Office of Chief Scientist) 503$ 489$
Research and development expenses 1,501 1,356 General and administrative expenses 756 770
Operating loss (1,754)$ (1,637)$ Financial expenses (income), net 65 20
Net loss for the period (1,689)$ (1,617)$ Loss per share:Basic and diluted net loss per share (0.08)$ (0.11)$ Weighted average number of shares used in computing basic and diluted net loss per share 21,012,208 14,522,818
Until Pluristem is able to monetize its PLX platform, the Company plans to continue its operations withissuances of securities and grants from the OCS. At the close of Pluristem’s September 2010 quarter theCompanyhadtotalcurrentassetsof$2.11million,totalcurrentliabilitiesof$1.23million,andaworkingcapitalsurplusof$883,000.CashandcashequivalentsasofSeptember30,2010amountedto$1.13million.Thisisadecreaseof$456,000from the$1.58millionreportedasof June30, 2010as thereceiptof$228,000attributable to theApril2010offerings (see below) were more than offset by 688,000 used in operating activities and $4,000 used ininvestingactivities.On October 11, 2010 and on October 12, 2010, Pluristem entered into securities purchase agreementswithcertaininvestors,pursuanttowhichitsold4,375,000sharesofourCommonstockatapriceof$1.20pershareand warrants to purchase 2,625,000 shares of common Stock, at an exercise price per share of $1.80. NoseparateconsiderationwaspaidfortheWarrants.Theaggregategrossproceedsfromthesaleofthesharesandthe warrants was approximately $5,250,000, which, less placement agent fees and other related expenses,resulted in net proceeds of approximately $5,009,000. The closingwas onOctober 18, 2010. TheWarrantshaveatermoffouryearsandareexercisablestartingsixmonthsfollowingtheissuance.Pluristemestimatesoperationalcashexpensesatapproximately$7million(beforedeductinganygovernmentgrants)infiscal2011.AlthoughmanagementbelievesthatPluristemwillneedtoraiseadditionalfundsbeforeithasanycashflowfromoperations,theCompanybelievesthatthefundsithas(September2010cashpositionof$1.1millionplus net proceedsofOctoberequity fundingof$5.0million), togetherwith the approvedR&DgrantfromtheOCS($2.5million),willbesufficientforoperatinguntilatleasttheendofcalendaryearof2011.Moreover, Pluristem’s new strategy to seek licensing agreements for non‐IM uses of PLX cells may garnersufficientfundstoobviatetheneedtoraisecapitalfromexternalsources.
Current Assets Cash and cash equivalents 1,127$ 1,583$ Short term bank deposit 517 913 Prepaid expenses 80 41 Accounts receivable from the Office of the Chief Scientist the Chief Scientist 318 706 Other accounts receivable 71 362
Total Current Assets 2,113$ 3,605$
Long-term Assets Long-term deposits and restricted deposits 169$ 168$ Severance pay fund 327 294 Property and equipment, net 1,756 1,555
Total Long-term Assets 2,252$ 2,017$
Total Assets 4,365$ 5,622$
Liabilities
Current Liabilities Trade payables 673$ 791$ Accrued expenses 157 118 Other accounts payable 400 372
Mr. Aberman, Chairman & CEO, joined Pluristem in September 2005 following 20 years of experience inmarketingandmanagementinthehigh technologyindustry. HeheldpositionsofChiefExecutiveOfficerandChairman in Israel, the USA, Europe, Japan and Korea in the fields of automatic optical inspection, networksecurity, video over IP, software, chip design, robotics, and private investment. In 1992, Mr. Aberman wasawardedtheRothschildPrizeforexcellenceinhisfieldfromthePresidentoftheStateofIsrael.Mr.AbermanholdsaB.Sc.inMechanicalEngineeringfromBenGurionUniversityinIsrael.YakyYanay,VPFinance&CFO
Mr. Yanayhas extensive experience in the financing andmanagement of technology companies, andprior tojoiningPluristeminNovember2006,hewasCFOofElbitVisionSystemLtd.,acompanyengagedinautomaticopticalinspection.Mr.Yanayplayedamajorroleinplanningandexecutingaturn‐aroundplanforElbitVisionSystem, including thecompletionofthreeacquisitionsandtheraisingofmorethan$20million,resultinginatriplingofthecompany’srevenuesandattainingprofitability. Mr.YanaybeganhisfinancialcareeratErnst&Young Israel in 1999 prior to which he served in the IsraeliMinistry of Foreign Affairs. Mr. Yanay holds abachelor’s degree with honor in business administration and accounting from the College of ManagementStudiesinRishonLeZion,IsraelandisaCertifiedPublicAccountantinIsrael.WilliamR.PratherRPh,MD,SeniorVPCorporateDevelopment
Dr. Prather is a Registered Pharmacist aswell as a Board Certified Internist and Geriatrician. Following 20yearsofmedicalpractice,Dr.Prather left thepracticeofmedicine topursueacareerin thefinancial industrywhere he has held senior healthcare research positions for a variety of investment banks. Dr. Prather co‐founded, Panacos, Inc.a public pharmaceutical company and has been on the Boards of several public andprivate companies, including Boston Biomedica Inc. PriMed, MdBio, and sat on the Advisory Board of MDSCapitalManagement, (aCanadianventurefirm). Dr.PratherreceivedhisBSinPharmacyandmedicaldegreefromtheUniversityofMissouri.FridaGrynspan,PhD,VPResearch&Development
Prior to joiningPluristem inMarch2009,Dr. Grynspan served asVice President of R&Dof a pioneering celltherapy company in Israel, where she was instrumental in bringing its first cell therapy product to amultinational, multi‐center Phase III clinical trial. Before that, Dr. Grynspan served as Senior Scientist atIntelligene Ltd., a developer of molecular biology diagnostic and therapeutic tools, and as an instructor andbiochemist at Harvard Medical School. Dr. Grynspan earned her Ph.D. in Chemistry/Biochemistry from theUniversity of Illinois, Chicago and her post‐doctoral degree from Harvard Medical School/McLean Hospital,wheresheworkedintheareasofMultipleSclerosisandAlzheimer'sdisease.
We believe Pluristem will aggressively pursue collaboration partnerships with major pharmaceuticalcompanies in coming months. The announcement of a new agreement, in our judgment, will likely have asignificant impact on the stock. We believe, longer term, the Company’s extensive product pipeline offerssubstantialopportunity.Weareassigninga12‐monthpricetargetof$3.00,whichisroughlytwicethecurrentvalue. However this targetwouldresult inamarketcapitalization forPluristemofonly$79million, a figuredwarfed by the multibillion dollar potential markets the Company is addressing. Accordingly, much higherlonger‐termpricetargetscanbeenvisioned.WeareinitiatingourresearchcoverageofPluristemTherapeuticswithaMarketOutperformrating
Note: When measuring against the comparable market index, the index used will be the Russell 2,000 index; a small-cap stock market index featuring the bottom 2,000 stocks in the Russell 3000 Index.
1. Market Outperform rating indicates the degree to which the analyst believes the shares are undervalued in relation to the comparable market index and its peers. The analyst price target will reflect belief that the performance of the stock price has the potential to be a minimum of 10% above the comparable index. Among the factors that could cause the analyst to add a speculative comment to the rating are the degree of financial risk represented by an investment in the shares, the market where the stock is listed, and the trading volume. These factors will be detailed in the report.
2. Market Perform rating indicates that the stock market price may follow the comparable market index.
3. Rating Suspended indicates that the analyst believes there may be corporate vents, such as announced financing or restatements of past earnings that make determination of a rating impossible at the time.
4. Market Underperform indicates that the analyst regards the company’s valuation is overvalued in relation to the comparable market index and its peers. The analyst price target will reflect belief that the performance of the stock price has the potential to be a minimum of 10% below the comparable index. In addition, there may be corporate events that lead to the lower performance than the measured market index.
5. Avoid rating indicates that the current fundamentals of the company have certain fundamental events that need to be addressed and corrected. The analyst believes it is prudent to stand aside until these events are corrected. The price target for the Avoid rating is suspended.
DeniseT.Resnik,M.S.DeniseResnik'scareerinthepharmaceuticalindustryhasspannedover35years.Forthepast27years,shehasconsulted to large,globalpharmaceuticalcompaniesandsmallerbiotechnologycompaniesin theareaofnewdrug development and education programs designed to advance research, innovation, and education inacademicmedicineandpublichealth.Ms.Resnikhasalsoconductedindependentfinancialanalysisofemerging,publicly‐tradedbiotechcompanies.Ms.Resnikholdsamaster'sdegreeinpharmacologyandabachelor'sdegreeinbiology.
AnalystCertification:I,DeniseT.Resnik,M.S.,herebycertifythattheviewsexpressedinthisresearchreportaccuratelyreflectmy personal views about the subject securities and issuers. I also certify that no part of mycompensation was, is, or will be, directly or indirectly, related to the recommendations or viewsexpressedinthisresearchreport.
Information, opinions or recommendations contained in TriPoint Global Research, LLC's research reports orresearch notes are submitted solely for advisory and information purposes. The information used andstatements of fact made have been obtained from sources considered reliable butwe neither guarantee norrepresent the completeness or accuracy. Such information and the opinions expressedherein are subject tochangewithoutnotice.ATriPointGlobalResearch,LLCresearchreportornoteisnotintendedasanofferingorasolicitationofanoffer tobuyor sell thesecuritiesmentionedordiscussed. Neither theFirm, itsprincipals,nor the assigned analysts own or trade shares of any company covered. TriPoint Global Research is anindependentresearchproviderandhasnotreceivedanycompensationforthepreparationofthisreport.TriPointGlobalResearch,LLC,2059CottonValleySt.,Henderson,NV89052Phone(702)914‐2141,website:www.tripointglobalresearch.com
