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By Jennifer Boggs
Managing Editor
Taking advantage of a summer stock climb on the back of its allogeneic cell therapy pipeline, Pluristem Therapeutics Inc. is nearly doubling its cash position with a $32 million public offering.
The Haifa, Israel-based biotech is selling 8 million units – each comprising one share of common stock and one warrant to purchase 0.35 of a share – priced Thursday at $4 apiece.
The news sent shares (NASDAQ:PSTI) down 15 percent Thursday, though they stabilized somewhat Friday, closing at $3.83, down 2 cents.
Pluristem's stock price had jumped nearly 70 percent since mid-July on a string of promising headlines – analysts at Maxim Group initiated coverage with a "buy" rating and an $8 price target, for instance – along with clinical advancements such as a Phase II study set to start testing PLacental Expanded (PLX) cells in intermittent claudication (IC), a subset of peripheral artery disease.
Oppenheimer & Co. analyst Boris Peaker noted a "ramp in development activity" at Pluristem in a July research note. "We are encouraged by Pluristem's progress," he wrote, looking ahead to the expected start of a pivotal Phase II/III study of PLX cells in critical limb ischemia (CLI) in the first quarter of 2013.
He added that OPCO's valuation "primarily focused on the lead indication, CLI, and we view additional indications as potential upside."
In addition to the CLI and IC indications, the company has said it plans to move into Phase II testing of PLX cells in Buerger's disease and muscle injury.
Last month, it received approval from Indian regulators to start a Phase II study in Buerger's, also known as thromboangiitis obliterans, a rare disease in which the blood vessels of the hands and feet become blocked and one that is highly prevalent in India, particularly among smokers.
Other indications likely will follow. Earlier this month, Pluristem reported that a third patient had received PLX cells on a compassionate use basis.
That subject, a 45-year-old male with acute myeloid leukemia, had suffered complications following a hematopoietic stem cell transplantation. After receiving two intramuscular injections of PLX cells, for a total dose of 600x106 cells, the patient's condition significantly improved, while no local or systemic side effects were observed.
Preclinical studies reported in August suggested PLX cells might also be effective in reducing pulmonary fibrosis and improving lung function in interstitial lung disease. And in July, the firm was invited by the National Institute of Allergy and Infectious Diseases to submit PLX cells for evaluation in models of acute radiation syndrome.
The PLX technology is designed to create allogeneic products by retrieving adherent stromal cells from the placenta and then expanding those cells in the firm's bioreactor system. No donor matching is required, as PLX cells are designed to be immune privileged and to possess immunomodulatory properties.
Pluristem's platform already has captured the attention of pharma. Last year, pulmonary hypertension (PH) specialist United Therapeutics Corp., of Silver Spring, Md., inked a deal to create a PH treatment using PLX cells. Under the terms, United paid $7 million up front, and Pluristem could earn up to another $55 million in milestone payments. (See BioWorld Today, June 21, 2011.)
The latest financing round, which adds to the $37.8 million in the bank as of June 30, is expected to close on or about Sept. 19. Proceeds will be used to support clinical studies, R&D activities and for general corporate purposes, including working capital and administrative expenses. The company is offering underwriters Jefferies & Co. Inc., OPCO, Needham & Co. LLC and Maxim Group an option to purchase up to 1.2 million shares of common stock to cover overallotments, which could add another $4.8 million to the total.
Pluristem's last public financing raised $36 million in early 2011. As of Sept. 5, the firm had about 47.5 million shares outstanding.
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