#pluristem

Israeli-based Pluristem has treated its first American patient suffering from COVID-19 complications under the country’s compassionate use program.

The news comes days after a report by the company showed that six critically ill coronavirus patients in Israel who are considered high-risk for mortality were treated with Pluristem’s placenta-based cell-therapy product and survived, according to preliminary data provided by the Haifa-based company.

In the US case, the patient was treated with the company’s PLX cell therapy at Holy Name Medical Center in New Jersey, where Pluristem is already running a Phase III critical limb ischemia study. Like the patients treated in Israel, this patient was critically ill with respiratory failure due to acute respiratory distress syndrome and was intubated in an intensive care unit for three weeks.

Seven high-risk patients in Israel suffering from COVID-19 are recovering after receiving treatment from a plant-based therapy product.

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Exclusive Interview With Pluristem Therapeutics Inc.(NASDAQ:PSTI) President Yaky Yanay

Q: Please tell us about yourself and your background. I was appointed Pluristem’s President and Chief Operating Officer in 2014. Prior to that, I served as Pluristem’s Chief Financial Officer and Secretary since 2006, and Executive Vice President since 2013. Before joining Pluristem, I was the Chief Financial Officer of Elbit Vision Systems Ltd., a public company. Prior to that I served as…

Investors who play the developing biotech niche are always on the lookout for shortcuts to approval. A shortcut can come in two ways. First, they can be regulatory and explicit, as in fast track status, orphan designations, accelerated approval pathways and the like. Second, they can be implicit due to the nature of the medical technology itself. It is these kinds of shortcuts that are often overlooked because in order to recognize them, the nature of the product needs to be understood analytically, rather than just being presented as a given by the FDA in an accelerated pathway.

Case in point, we have Pluristem Therapeutics Inc. (NASDAQ:PSTI), a company that Market Exclusive has been paying close attention to for some time, for this reason among others. On September 14, the company announced the principal investigator for one of its early stage Phase I trials expected to begin enrollment in the coming months. The trial will test Pluristem’s PLX-R18 placental cells in 30 patients. The cells are designed to repair the hematopoietic (AKA blood) system, in this case the systems of people who have undergone blood stem cell transplants for various reasons but have not achieved full recovery.

We’ll get into exactly why this trial may have embedded within it an implicit shortcut to approval shortly. First, a bit about the principal investigator just announced. He is Dr. Hillard Lazarus of Case Western Reserve University, and a brief biography can be found in the company’s most recent press release as well as here. In short, Dr. Lazarus is a pioneer in the field of mesenchymal stem cell transplantation and research, a field he has specialized in for over a quarter century. He was involved in both selecting the indication that this particular trial will be testing, as well as the study design itself.

Market Exclusive had the opportunity to speak with Dr. Lazarus about the trial, its setup, and the idea behind it, which is as follows. When a patient receives a hematopoietic cell transplant, or HCT, whether due to blood cancer or other reasons, the entire system must be rebooted from scratch, whether the transplant is allogeneic (cells from a donor) or autologous (from the patient’s own cells). In either case, a complete reboot is required as the old system is expunged, and unfortunately a full successful reboot doesn’t always occur. Sometimes, while the HCT succeeds, it only does so partially, and the patient is left with a blood system that needs supplementation through routine transfusions. It’s something akin to replacing a broken transmission while the new one can only go up to 2nd or 3rd gear. The car can now drive, but not very well.

The trial will use Pluristem’s PLX-R18 cells to help fully integrate the new blood system. The reason PLX-R18 may help “complete” these incomplete HCT’s is that the cells, being placenta cells, are naturally designed to build entire systems from scratch in the womb. Keep in mind that the cells of the placenta exist in order to, among other things, guide the formation of entirely new systems from scratch as an embryo grows into a fetus complete with every system a human needs to survive.

It’s a bit more complicated than that though, because in their natural state, these cells do this by secreting certain cytokines that promote growth and development of specific biological systems. Placental cells in their natural state are automatically programmed to secrete the right cytokines at the right times. If you’re growing them in a model though, you need to be able to tweak more exactly what the cells should secrete in order to aid in the development of any given system on demand, in this case the hematopoietic system. Pluristem’s method of manufacture of these cells, which originate from donated placentas, is proprietary, but generally speaking they are cultured inside 3D models that mimic the human body and “prodded” in such a way as to secrete the desired cytokines for a given indication.

In the case of PLX-R18, the cells are designed to secrete the proteins involved in the development of this specific system. The theory is that incomplete HCT happens because the cytokines that originally aided in the development of the system in the womb are absent in a subsequent transplant as an adult. Meaning, if Pluristem tweaked the cells right, they should in theory aid in the full redevelopment of the hematopoietic system post transplant. Preclinical evidence has suggested this may be the case, and now we will see if this can translate to humans.

And how can this early Phase I trial be seen as an implicit shortcut to approval? Typically, Phase I trials are designed to assess safety. Safety is not by itself a sufficient condition for approval obviously though it is a necessary one, so successful Phase I trials do not usually inspire much speculative buying. This Phase I trial is similar in its structure in that the primary endpoint is safety, though that is not expected to be a hurdle because these are simply human cells with no immunogenicity, so the chances of them causing a reaction are very low. It is the secondary endpoints that are much more interesting, and here is where the inherent shortcut may apply.

These secondary endpoints include changes in platelet and hemoglobin levels, frequency of blood transfusions, how fast a patient shifts from transfusion dependence to independence, and general quality of life. Since the trial will be open label, both the company and its investors will be able to see results as they happen (or at least as they are reported) and we will get a pretty good idea not only if these PLX-R18 cells work as intended, but also whether by implication whether Pluristem’s entire cell manufacture and tweaking strategy is on target or not.

If it is, then this early Phase I trial will show more than just safety of something expected to be safe in the first place. It could vindicate Pluristem’s approach to both stem cell therapy in its choice of placental cells as well as their method of manufacture, opening up the company to opportunities currently closed to it due to its small size and limited capital.

Is this an explicit shortcut to approval? Not exactly, and the company is still quite risky if the trial shows no efficacy, a considerable possibility. In either case, Dr. Lazarus did note that studies of the mechanism of action will be conducted in order to get a better idea of how PLX-R18 cells work with the hematopoietic system, as the understanding is currently quite limited.

Regardless, in our view, this early Phase I trial will have broader implications than your average early safety trial, potentially flowing into the whole line of Pluristem’s clinical development programs. It can therefore be viewed by investors as a Phase II in terms of its possible effect on the stock.

Japan is the stem cell capital of the world. From the Nobel winning efforts of Shinya Yamanaka in the field of mature to pluripotent stem cell reprogramming, to the STAP scandal and its suicide tarnished fallout, if there’s something to talk about in the sector, chances are it happened first in Japan.

Japan’s development of the stem cell space is being encouraged by government policy in the country targeting the promotion of stem cell research and development activity. The Japanese government put into effect a raft of new laws in November 2014, designed to incentivize the industry.

The Japanese Pharmaceuticals, Medical Devices, and Other Therapeutic Products Act (PMDAct) allows conditional and time-limited approval for regenerative medical products based on the ensured safety and estimated efficacy in small-scale clinical trials. In other words, it’s far quicker and easier to take a stem cell treatment to market in Japan than it is anywhere else in the world due to relaxed government regulation. For the companies operating in the Japanese stem cell sphere, this is clearly a huge advantage. It’s also an advantage to those looking to pick up an exposure to the space, with a number of US listed companies establishing operational locations in Japan to take advantage of the legal environment and framework.

Here are two potential exposures to the stem cell space, each of which benefits from a Japanese operational presence.

ASTELLAS PHARMA NPV (OTCMKTS:ALPMF)

Let’s kick things off with Astellas. In May 2016, and following its acquisition of then development stage stem cell biotech Ocata, Astellas formed what it now calls the Astellas Institute for Regenerative Medicine (AIRM). The AIRM is actually headquartered in Massachusetts, but its primary research team is in Tsukuba, Japan. Just as Japan is a hot spot for stem cell research globally, Tsukuba is a sort of unofficial hot spot for the sector in Japan.

What’s Astellas working on? Since its operations are rooted in its acquisition of Ocata, the AIRM’s primary focus is the continuation of the Ocata programs – specifically, regenerative treatments in ophthalmology. The two lead indications, and the only two that Astellas lists as ongoing in its latest pipeline report, are Stargardt’s disease (SD) and dry age-related macular degeneration (AMD). These are essentially the same condition, with slight variations based on the age of the patient.

The company’s treatment is rooted in what’s called the retinal pigment epithelial cell, or RPE. In our eyes, we have photoreceptor cells, which can be further broken down into rods and cones. Rods deal with low light images and have no color recognition, but they allow us to see in the dark because they only require low light to operate. Cones are responsible for photopic, or high light, vision, and can recognize color. Rods and cones require a blood supply, and this is the role of the RPE cells. If the RPE deteriorates, the photoreceptors don’t get the blood they need, and vision deteriorates. Both Stargardt’s and dry AMD are the deterioration of the RPE layer at the back of a patient’s eye, with the former being associated with younger and the latter with older patient populations.

Astellas’ program is working on the regeneration the RPE layer in both SD and AMD sufferers. How? By introducing stem cells to the layer, and allowing these cells to mature into RPE cells.

The program showed some good results in a Phase I run by Ocata, and now the AIRM is pushing through a Phase II in Japan and the US. From a timeline perspective, since Astellas took over the Ocata program things have gone pretty quiet. It’s a notoriously long-winded process to harvest pluripotent stem cells so chances are we are looking at a 3 to 5-year study rather than a quick turnaround. It’s worth keeping an eye on, however. If Astellas can demonstrate its ability to regenerate RPE cells in both SD and AMD patients, the potential wider indications are far beyond ophthalmology in scope. To keep an eye on perspective here in terms of value, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) increased in value by over a factor of 10 thanks largely to its EYLEA treatment for wet AMD, a much rarer form of AMD with similar symptoms.

This is a pretty risk-mitigated exposure to the Japanese stem cell space, since Astellas has such a wide portfolio of products and R&D candidates. Next, let’s take a look at what we might consider a direct allocation.

Pluristem Therapeutics Inc. (NASDAQ:PSTI)

Pluristem has taken a very different approach to stem cell therapy, in that it uses stem cells derived from the placenta right after the birth of a baby. The main difference is that these cells are stromal cells, which have a far lower immunogenicity than, say, the cells Astellas is using. This means they are not normally affected by the immune system in any capacity.

Low immunogenicity means that there doesn’t need to be any immune matching before use. Cells with high immunogenicity would get recognized by the host immune system as foreign, and attacked. In traditional stem cell therapy, therefore, physicians need to carefully match donor cells with a host so as not to evoke an immune response. The placenta must have low immunogenicity because it protects two different immune systems – mother’s and baby’s – from attacking each other.

With Pluristem’s treatments, this matching isn’t necessary, and so the indications it targets are easier to go at from a logistical standpoint. This reduces trial time, cost etc., and should speed up the path to commercialization considerably. Couple this with the rapid regulatory pathway in Japan, and that path becomes even shorter.

Pluristem is going after many indications right now, but one of the lead targets is a condition called critical limb ischemia. CLI is when fatty substances build up in the walls of the arteries generally in the legs and cause blockages. There are around 1.7 million CLI sufferers in the US, Europe and Japan, and prognosis is poor as things stand. The majority of patients with any sort of severe form of the condition will require amputation and many will die. It’s an unmet need, and it costs the US somewhere in the region of $10 billion annually.

Phase I data from two trials has led to the acceptance of Pluristem and its treatment – called PLX-PAD into accelerated regulatory programs in both Japan and Europe. It’s the only treatment in the world that is in both programs. What does this mean? For both, it means that the company likely won’t need Phase III data before it can pick up preliminary approval in Japan and possibly Europe. Instead, a pivotal trial demonstrating safety, and then an approval application combining the efficacy data from both the Phase I’s and the safety and efficacy data from the Phase II’s. This results in obvious cost and time savings. Both trials are expected to kick off before the close of this year, meaning Pluristem could be targeting marketing approval in both Europe and Japan by early 2018, with enough cash on its balance sheet to get there to boot.