Pluristem Therapeutics, Inc. (NASDAQ:PSTI)

CAPS Rating: 1 out of 5

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Player Avatar TSIF (99.96) Submitted: 8/11/2012 8:07:52 PM : Underperform Start Price: $4.34 PSTI Score: +13.96

I might be a little early considering the chart on downthumbing Pluristem Therapeutics, INC. Besides the testimony of a cure in zzlangerhans pitch, ( http://caps.fool.com/Pitch/PSTI/6424450/theres-certainly-no-shortage-o.aspx?source=itxsittb0000001) there was second "cure" announced.
http://seekingalpha.com/article/790331-pluristem-s-cell-therapy-for-bone-marrow-a-blockbuster-in-the-making?

My downthumb thougts mirror the comments by SMaturin in the comments. Similar to the rebuttals to him and to any concern over share price mentioned on a message board, those with "conviction bias" and/or $$$$ on their forehead will no doubt label us as heretics for a downthumb. One can be supportive of the potential for a cure and still negative on valuation metrics, (at least one can if they have any value on their portfolio). At this stage, phase I, the 60% share price rise since the first "incident" will fade. This might hit $5.00 or $6.00 first, but I doubt the later.

The two publicized, undocumented cases do not support any data as to overall population of test subjects, safety, time and money for "real testing". There have been at least three arguments, beisides the "miracle cure" that Pluristem share price will rise further.
1. The argument has been made that with $42 Million in cash that Pluristem is well funded. I give better than even, (probably 80% or better) odds that Pluristem will issue new stock into this price rise. One, it's what the majority of biopharms do on a price rise this early, and two it is "early". The additional funding will be needed for trials and management knows the share price rise is not sustainable as the current speculating population gets bored.
2. The argument has been made that Pluristem will get "orphaned drug" status from the FDA and be on the market in a year. For this type of treatment and the time needed to design and develop enough test cases, I think even if they did get orphaned status the total testing will be 2-3 years at best. I think orphaned status is unlikely.
3. The argument has been made that partners are lining up, or even a buyout at a huge multiple. Again, not likely. The process/method itself is not unique enough. While large pharmas do sometimes partner early to ensure a stable of new products with FDA patent protection they don't haphazardly jump into experimental research.

Again, I'll be branded as a heretic, but savvy investors need to learn to invest with a thoughtful process. Some part of your portfolio, risk aware, can be speculative, but one should be willing to lose the entire investment and one should try to get a "good entry". Good entry for Pluristem, even if a valid biopharm is well below the current share price.

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