With the war against COVID-19 waging on, Wall Street focus has locked in on the names at the frontline. Battling a formidable opponent capable of spreading without a trace, innovative technologies will be required to arm the world’s population. As such, market watchers are standing at the ready, hoping to identify the healthcare companies that can deliver effective weapons against the deadly virus.
Pluristem Therapeutics (PSTI) has a fighting chance. On April 7, the company reported its treatment for acute respiratory failure and inflammatory complications caused by COVID-19 had demonstrated robust preliminary results from the compassionate use program, sending shares 21% higher in response. Back in March, its PLX cell treatment, which uses allogeneic mesenchymal-like cells with immunomodulatory properties, got the go ahead from the Israeli Ministry of Health for use in treating severe COVID-19 patients on a per-patient basis. The therapy was designed to prevent or even reverse the harmful over-activation of the immune system.
The results have been promising to say the least. Management stated that so far, seven patients in the ICU with Acute Respiratory Distress Syndrome (ARDS) have been treated. All of the patients are alive, meaning that the survival rate is 100%, and six out of seven have progressed through at least one week of follow-up. On top of this, four patients saw respiratory parameters improve, one remained stable and only one demonstrated deterioration. Three are also in the advanced stages of being taken off ventilators.
Weighing in for H.C. Wainwright, analyst Swayampakula Ramakanth calls the early data “encouraging” and thinks the treatment could drive substantial gains for PSTI, with the next step being a regulated and multinational clinical study.
“In our view, with the ongoing pandemic affecting nearly every country and stressing healthcare systems around the world, new, effective treatments are urgently needed. Therefore, we believe that both the FDA and the EMA may expedite the approval for clinical studies and simply the regulatory paths going forward. With regulatory expediency and patients only needing a 28-day follow-up, we believe the company could complete the initial studies and report results in 2H20,” Ramakanth explained.
In line with this optimistic take, Ramakanth left a Buy rating on the stock. At $15.50, the price target puts the upside potential at a whopping 277%. (To watch Ramakanth’s track record, click here)
As for other analyst activity, it has been relatively quiet when it comes to PSTI. Only one other call has been issued recently, but it was also bullish, so the analyst consensus is a Moderate Buy. The $11.75 average price target is less aggressive than Ramakanth’s and implies 173% upside potential. (See Pluristem stock analysis on TipRanks)
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