Pluristem Therapeutics Inc.
) recently inked an exclusive out-license and strategic
partnership agreement with Cha Bio&Diostech. The agreement
will allow Cha Bio&Diostech to use Pluristem's PLacental
eXpanded (PLX) cells for peripheral artery disease (PAD) in South
Korea. The deal is specifically for two indications; critical
limb ischemia (CLI), and intermediate claudication (IC).
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As per the agreement, Cha Bio&Diostech will be responsible
for performing and funding the clinical trials to treat patients
suffering from CLI and IC using PLX-PAD in South Korea. The
clinical studies will be conducted under the supervision of the
Korea Food & Drug Administration (KFDA).
Meanwhile, Pluristem will retain rights to its proprietary
manufacturing technology as well as cell-related intellectual
property. The company will also have rights to use the data
generated from the studies, conducted by Cha Bio&Diostech, to
advance its PLX candidates outside South Korea.
Pluristem and Cha Bio&Diostech will form a joint venture
after receiving the first regulatory approval for a PLX product
in South Korea. The joint venture will be co-owned by both the
companies and will commercialize PLX cell products there.
Moreover, Pluristem is expected to issue 2.5 million shares to
Cha Bio&Diostech on achieving certain milestones (expected by
Sep 2013). The issued shares will be in consideration to the
issuance of around 1 million shares of Cha Bio&Diostech at a
price of $4 per Pluristem share. The total consideration will be
around $10 million for Pluristem shares (based on average closing
price of CHA common shares over the last 30 trading days).
As per market research firm Clearstate, there are around 1
million people in South Korea suffering from PAD. The prevalence
of the disease is expected to increase further. Consequently,
Pluristem's deal with the South Korean company encourages us.
Pluristem was also in the news recently when it announced that it
has provided the US Food and Drug Administration (FDA) with
additional safety-related information regarding IC. Pluristem's
action followed the clinical hold placed by the FDA on A phase II
The FDA action followed a serious allergic reaction in one of the
patients in the trial who was subsequently hospitalization. The
patient was discharged the next day after the symptoms were
managed. The IC study in Germany has also been put on hold.
Pluristem develops placenta-based cell therapies and currently
does not have any approved product/therapy. Hence, a hold on the
mid-stage trial in the US and Germany is a major setback for the
company. We expect investor focus to remain on further updates on
the clinical hold.
Pluristem presently carries a Zacks Rank #4 (Sell) reflecting
short-term pressure on the stock. Companies that currently look
). All the three carry a Zacks Rank #1 (Strong Buy).