Investors who play the developing biotech niche are always on the lookout for shortcuts to approval. A shortcut can come in two ways. First, they can be regulatory and explicit, as in fast track status, orphan designations, accelerated approval pathways and the like. Second, they can be implicit due to the nature of the medical technology itself. It is these kinds of shortcuts that are often overlooked because in order to recognize them, the nature of the product needs to be understood analytically, rather than just being presented as a given by the FDA in an accelerated pathway.
Case in point, we have Pluristem Therapeutics Inc. (NASDAQ:PSTI), a company that Market Exclusive has been paying close attention to for some time, for this reason among others. On September 14, the company announced the principal investigator for one of its early stage Phase I trials expected to begin enrollment in the coming months. The trial will test Pluristem’s PLX-R18 placental cells in 30 patients. The cells are designed to repair the hematopoietic (AKA blood) system, in this case the systems of people who have undergone blood stem cell transplants for various reasons but have not achieved full recovery.
We’ll get into exactly why this trial may have embedded within it an implicit shortcut to approval shortly. First, a bit about the principal investigator just announced. He is Dr. Hillard Lazarus of Case Western Reserve University, and a brief biography can be found in the company’s most recent press release, with a more thorough one here. In short, Dr. Lazarus is a pioneer in the field of mesenchymal stem cell transplantation and research, a field he has specialized in for over a quarter century. He was involved in both selecting the indication that this particular trial will be testing, as well as the study design itself.
Market Exclusive had the opportunity to speak with Dr. Lazarus about the trial, its setup, and the idea behind it. Dr. Lazarus explained that when a patient receives a hematopoietic cell transplant, or HCT, whether due to blood cancer or other reasons, the entire system must be rebooted from scratch, whether the transplant is allogeneic (cells from a donor) or autologous (from the patient’s own cells). In either case, a complete reboot is required as the old system is expunged, and unfortunately a full successful reboot doesn’t always occur. Sometimes, he continued, while the HCT technically succeeds, it only does so partially, and the patient is left with a blood system that needs supplementation through routine transfusions. It’s something akin to replacing a broken transmission while the new one can only go up to 2nd or 3rd gear. The car can now drive, but not very well.
As for the trial itself, Dr. Lazarus’s idea was to use Pluristem’s PLX-R18 cells to help fully integrate the new blood system. What he specifically noted about the trial is that placental cells from which PLX-R18 cells are taken, are naturally designed to guide the formation of entire systems from scratch in the womb. Cells from the placenta therefore go hand in hand with the development of the hematopoietic system in the first place. Thisis the reason PLX-R18 may help complete these incomplete HCT’s.
In their natural state, these cells do this by secreting certain cytokines that promote growth and development of specific biological systems. Placental cells in their natural state are automatically programmed to secrete the right cytokines at the right times. If you’re growing them in a 3D model like Pluristem though, you need to be able to tweak more exactly what the cells should secrete in order to aid in the development of any given system on demand, in this case the hematopoietic system. Pluristem’s method of manufacture of these cells, which originate from donated placentas, is proprietary, but generally speaking they are cultured inside 3D models that mimic the human body and “prodded” in such a way as to secrete the desired cytokines for a given indication.
In the case of PLX-R18, the theory according to Dr. Lazarus is that incomplete HCT happens because the cytokines that originally aided in the development of the system in the womb are absent in a subsequent transplant as an adult. Meaning, if Pluristem tweaked the cells right, they should in theory aid in the full redevelopment of the hematopoietic system post transplant. Preclinical evidence has suggested this may be the case, and now we will see if this can translate to humans.
So how exactly can this early Phase I trial be seen as an implicit shortcut to approval? Typically, Phase I trials are designed to assess safety. Safety is not by itself a sufficient condition for approval obviously though it is a necessary one, so successful Phase I trials do not usually inspire much speculative buying. This Phase I trial is similar in its structure in that the primary endpoint is safety, though that is not expected to be a hurdle because these are simply human cells with no immunogenicity, so the chances of them causing a reaction are very low. It is the secondary endpoints that are much more interesting, and here is where the inherent shortcut may apply.
These secondary endpoints include changes in platelet and hemoglobin levels, frequency of blood transfusions, how fast a patient shifts from transfusion dependence to independence, and general quality of life. Since the trial will be open label, both the company and its investors will be able to see results as they happen (or at least as they are reported) and we will get a pretty good idea not only if these PLX-R18 cells work as intended, but also whether by implication whether Pluristem’s entire cell manufacture and tweaking strategy is on target or not.
If it is, then this early Phase I trial will show more than just safety of something expected to be safe in the first place. It could vindicate Pluristem’s approach to both stem cell therapy in its choice of placental cells as well as their method of manufacture, opening up the company to opportunities currently closed to it due to its small size and limited capital. Is this an explicit shortcut to approval? Not exactly, and keep in mind that the company is still risky and that the higher importance of this Phase I trial is a bit of a double-edged sword. Regardless, this Phase I trial could have Phase II-like effects on Pluristem and its stock, and is not your average typical safety trial.