DS Brokerage today initiated coverage of Pluristem Therapeutics Ltd. (Nasdaq:PSTI; DAX: PJT: PLTR) with a "Buy" recommendation and target price of $7.80, a 91% premium on Friday's closing price on Nasdaq of $4.08. Pluristem is developing therapies based on placental stem cells for a range of illnesses. Its treatment for critical limb ischemia, the sudden lack of blood flow to a limb, due to an embolism or thrombosis, and which can result in gangrene and amputation, is in the most advanced development stage.
DS Brokerage VP research Eran Jacoby says, "We see great promise in Pluristem, which we are trying to price conservatively, in view of the difficulty in comparing it with other companies. We based the company's valuation solely on the potential for success of treating critical limb ischemia in the US and Europe. We estimate a 45% probability of penetration by 2016. It should be remembered that the company has more potential products in its pipeline. The company has $40 million in cash plus milestone payments, which are a fairly reasonable measure of its understanding its potential progress."
Jacoby adds, "There is no doubt that Pluristem is one of the most thrilling dream companies in the global biotechnology market, especially with its combination of factors, such as fascinating area of activity, leading technology, and likelihood of finding an effective treatment for critical limb ischemia."
Jacoby says that Pluristem is engaged in one of the most exciting medical fields, which also excites the capital market. "The use of stem cells for treating a range of serious diseases, including cardiology and vascular diseases, cancers, and neurological disorders is no longer a distant dream," he says.
Jacoby says that main risks facing the company are development difficulties and regulations, and technology and financial risks.
Jacoby notes that while there is no concrete information, the scenario in which a pharmaceutical or biotechnology company acquires Pluristem is quite reasonable, and could occur in the foreseeable future.
Published by Globes [online], Israel business news - www.globes-online.com - on September 4, 2012
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