Pluristem Therapeutics Ltd. (Nasdaq:PSTI; DAX: PJT) last night published its financial report for the first quarter of 2008. The drug development company has no sales or revenue and relies on private placements of shares and bonds to stay solvent. The company posted a net loss of $2.6 million for the first quarter, compared with $3.9 million for the corresponding quarter of 2007. However, the net loss in June 2007-March 2008 rose to $7.4 million from $4.9 million for the corresponding period a year earlier. The share fell 22% yesterday to $2.15.
The company had a negative cash flow or $11.7 million and its cumulative deficit since it was founded in May 2001 has reached $22.9 million. The company attributes the negative cash flow to R&D and general and administrative expenses, and it expects the operating expenses to increase as animal and then human clinical trials of the company's drugs get underway. The company predicts that its 12-month operating expenses will total $5 million.
Pluristem's R&D expenses totaled $3 million in July 2007-March 2008, 122% than the $1.4 million for the corresponding quarter in 2006-2007. The company attributed the increase to an increase in stock-based compensation to employees and consultants from $642,000 to $1.4 million, and to the increase in salary and subcontractor expenses as the company's workforce has expended ahead of research activity for clinical trials.
Pluristem develops Mesenchymal and stem cell production technology and the commercialization of cell therapy products. The company said, "We do not expect to generate any revenues from sales of products in the next twelve months. We may generate revenues from the sale of licenses to use our technology. Our products will likely not be ready for sale for at least three years, if at all."
The company added, "In our management's opinion, we expect to achieve the following events or milestones in the next twelve months in order for us to begin generating revenues as planned in three years or more: to start the first Phase I clinical trial with PLX-PAD after Food and Drug Administration (FDA) or European Medicines Agency (EMEA) approval; submit IND/IMPD for additional clinical indication; and optimize our 3D PluriXTM Bioreactor System." The company noted that it has made progress using the 3D environment of the PluriXTM Bioreactor System to produce a dense population of stromal supporting cells, but that it was necessary to optimize the system in order to achieve production capabilities. Finally, the company said that was seeking to improve the analytical methods of its technology and processes.
Pluristem said in its guidance, "We believe that we have sufficient funds to operate for at least two fiscal quarters. Management believes that we will need to raise additional funds before we have any cash flow from operations. We believe that it will take several years for us to complete the approval process for our products in the US or any other jurisdiction. In addition, future decisions regarding any acquisitions that we may choose to make or expanded product development, as to which there can be no assurance of success, will require additional capital, which must be raised through the issuance of additional securities and/or incurring debt."
Published by Globes [online], Israel business news - www.globes-online.com - on May 15, 2008
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