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Business Meeting

The Unrealized Potential of Stem Cell Therapy

Over the last decade or so, I have observed a tempering of what was once a large and growing interest in stem cell therapies by patients, physicians and investors. I believe this dampening of enthusiasm has occurred as the public has awakened to some of the realities surrounding the logistics of the mass production, regulatory approval and eventual administration of living cells into people. In this article are my opinions as to why the stem cell industry may be deserving of this love-hate relationship and why the “stem cell” products currently closest to approval aren’t “stem cells” at all.

In February 2004, Dr. Woo Suk Hwang of South Korea announced he had successfully derived stem cells from a cloned human embryo, an achievement that earned him the reputation as a ‘national treasure’ in South Korea and the “king of cloning” throughout the rest of the world. Despite Dr. Hwang’s subsequent disgrace and conviction for falsifying data, the damage had been done. The public believed the ability to regenerate organs from “stem cells” was right around the corner. These events signaled the controversial popularity surrounding embryonic stem cells (ESCs), the harvesting of which involves the destruction of embryos. President Bush’s restrictions on research involving ESCs combined with the opinions of organizations such as the Catholic Church had a chilling effect but could not contain the public’s interest and misconceptions that ESCs could regenerate entire organs such as hearts and livers.

In 2009, Geron Corporation, a US public company dealing with embryonic stem cell therapy aimed at spinal cord injuries, enjoyed a market value in excess of $1B. However, in one of the most significant blows to ESCs in particular, the stem cell industry in general and a wake-up call for Joe Q occurred three years later when Geron announced that they were exiting the stem cell market. Geron stated this decision was made after a “strategic review of the costs, value inflection timelines and clinical, manufacturing and regulatory complexities” associated with pursuing the continued research and development of ESCs versus other assets they owned. I would emphasize the regulatory complexities part of this statement. Geron’s Investigational New Drug (IND) application totaled 21,000 pages, of lot which was devoted to addressing the regulators concerns that, at the end of the day, how can you approve a product containing ESCs when ESCs, by definition, forms tumors (teratomas).

allogeneic MSCs have emerged as the regenerative medicine industry’s best chance of developing commercial products over the near term.

However, obscured in the shadow of the ESCs popularity, preclinical and clinical work was being conducted on its stepchild, the adult stem cell. For the purpose of this article, we define ASCs as any cell therapeutic that is not an ESC or hematopoietic stem cell (HSC), the cell that differentiates into our blood lineages. Adult stem cells harbor no ethical controversies, as the procurement of these cells does not entail destroying the embryo. The vast majority of adult stem cells being used in preclinical and clinical trials for a variety of indications exist under the general category of mesenchymal stem cells (MSCs), although these cells come under different names, such as mesenchymal stromal cells, mesenchymal precursor cells and mesenchymal-like stromal cells. MSCs can be obtained from several different sources such as bone marrow, adipose tissue, the placenta and menstrual fluid. Additionally, MSCs can be obtained from the patient (autologous) or from a source other than the patient (allogeneic). Several entities are attempting to commercialize their particular MSC and are represented by companies such as Mesoblast Limited, Athersys Inc., Aastrom Biosciences, Inc., and Osiris Therapeutics, Inc. which use bone marrow as a source of their MSCs and Pluristem, which uses the placenta (PLacental eXpanded cells), Medistem Inc., which uses menstrual fluid and Cytori Therapeutics, Inc. and TiGenix NV which use adipose tissue. All of the companies mentioned are allogeneic-based other than Aastrom and Cytori, which are autologous-based companies. Autologous-based therapies exploit a business model that is not intended to supply cells for the general population, as allogeneic therapy is potentially able to provide. Although still believed to fulfill a niche, the popularity of the autologous “personalized-medicine” approach has softened since the discovery that allogeneic MSCs are immune competent and can be administered to patients without histocompatibility matching.

Interestingly, the mechanism of action of MSCs is not one of differentiation into tissue and organs. Instead, these cells act as drug delivery devices. They respond to signals from injured tissue by secreting a cocktail of anti-inflammatory, angiogenic, and cytoprotective therapeutic proteins that exert their pharmacologic effects on the injured tissue. Therefore, if you define a stem cell as Webster’s dictionary does (i.e. a stem cell is an unspecialized cell that gives rise to differentiated cells), then the MSCs currently in clinical trials should not rightfully be called “stem” cells.

Regardless of whether they are categorized as “stem” cells or not, allogeneic MSCs have emerged as the regenerative medicine industry’s best chance of developing commercial products over the near term. This is the unrecognized potential of cell therapy. ASCs were the king. Allogeneic MSCs are now the king. Allogeneic cell therapy products are already being marketed for Graft versus Host Disease (GvHD), a complication of bone marrow transplantation, and Diabetic Ulcers. More importantly, however, are the allogeneic MSCs in advanced clinical trials for important indications. Companies are currently involved in Phase II or III clinical trials for degenerative indications that include Rheumatoid Arthritis, Inflammatory Bowel Disease, Diabetes, Emphysema, Ischemic Heart Disease, Congestive Heart Failure, Osteoarthritis, Ischemic Stroke, Peripheral Artery Disease, Bone Marrow Transplantation and Muscle Injury. Examining these indications reveal why allogeneic MSC-related products will be the reason the “stem cell” regenerative medicine industry should be highly successful in the future.

Just recently, Pluristem announced the initiation of South Korean sites in the Phase II study assessing (PLX) cells in the treatment of intermittent claudication (IC)

Cell Therapy in South Korea

Just recently, Pluristem announced the initiation of South Korean sites in the Phase II study assessing (PLX) cells in the treatment of intermittent claudication (IC). Patient screening is now underway at three clinical centers, making South Korea the fourth country to participate in this randomized, double-blind, placebocontrolled Phase II trial. The trial has been ongoing at clinical sites in the U.S., Israel and Germany with an enrollment target of 150 patients. The study is being conducted by CHA BioTech (Kosdaq: CHA) under an exclusive licensing agreement for the use of PLX cells for peripheral artery disease (PAD) in South Korea. Under the terms of Pluristem’s licensing agreement with CHA, if there is regulatory approval for a PLX product in South Korea Pluristem and CHA will establish a joint venture (JV) co-owned by the parties; they will share the revenues and income generated through sales of PLX cell therapies in the South Korean market. It is estimated that one million people in South Korea suffer from PAD and this number is expected to grow. These products have the potential to significantly modify degenerative diseases where the current relief enjoyed in the past by patients has only been symptomatic.

September 1, 2014

Zami Aberman

Chief Executive Officer

Pluristem Therapeutics, Inc.

Zami Aberman Chairman & CEO joined Pluristem in September 2005 and changed the Company’s strategy towards cellular therapeutics. Mr. Aberman’s vision to use the maternal section of the Placenta (Decidua) as a source for cell therapy, combined with Pluristem’s 3D culturing technology, led to the development of the Company’s unique products. Mr. Aberman has 20 years of experience in marketing and management in the high technology industry. He has held positions of Chief Executive Officer and Chairman in Israel, the USA, Europe, Japan and Korea. He has operated within high-tech global companies in the fields of automatic optical inspection, network security, video over IP, software, chip design and robotics. Mr. Aberman serves as the Chairman of Rose Hitech Ltd., a private investment company. In the past he has served as the Chairman of VLScom Ltd., a private company specializing in video compression for HDTV and video over IP and as a Director of Ori Software Ltd., a company involved in data management.

Prior to that, he served as the President and CEO of Elbit Vision Systems (EVSNF.OB), which supplies inspection systems for the microelectronics industry. Mr. Aberman has served as President and CEO of Netect Ltd., specializing in the field of internet security software and was the Co-Founder, President and CEO of Associative Computing Ltd., which developed an associative parallel processor for real-time video processing. He has also served as Chairman of Display Inspection Systems Inc., specializing in laser based inspection machines and as President and CEO of Robomatix Technologies Ltd. (RBMXF. OB). In 1992, Mr. Aberman was awarded the Rothschild Prize for excellence in his field from the President of the State of Israel. Mr. Aberman holds a B.Sc. in Mechanical Engineering from Ben Gurion University in Israel.


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