Back in August, Israel's Pluristem Therapeutics ($PSTI) breathlessly announced that its stem cell therapy had saved the life of a 54-year-old woman teetering on the brink of death. A clinical investigator was quoted in the company's release calling the intervention with its PLX cells a "real breakthrough," coming just months after another life-saving intervention with a 7-year-old.
Pluristem's share price soared. Two executives used the opportunity to sell shares. But just months later, when the child Pluristem had claimed to save suddenly died, the biotech stayed mum. Days after the death, the company raised cash through a sale of stock. Then in early October Globes reported the child's death. And today Bloomberg follows with an article asking if the biotech's silence violates SEC rules on public disclosures and what "material" statements are required in this event.
Pluristem insists it played by the rules and wasn't required to follow up after the initial success.
"What counts legally is whether there is an improvement in the physical condition," CEO Zami Aberman told Bloomberg. "When we saw significant improvement in the blood count, we declared a successful treatment."
SEC experts say that it could all fall into a regulatory gray area, but bioethicists had no trouble assessing the situation. When it comes down to right and wrong, Pluristem was wrong.
"If you're going to promote treatment success you need to man up when you get failure," says Paul Root Wolpe in Atlanta. It would also be fair to point out that any biotech that claims it saved the life of a patient is making a boast that can't be backed up by data. And what professional drug developer does that?
- here's the article from Bloomberg