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Controversy ensues over stem cell company stock sales and patient death

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In response, Pluristem calls the Bloomberg article “factually inaccurate and misleading.”

The patient, a 7-year-old girl with a bone-marrow disease, died within months after being treated with the company’s PLX stem cells. While the PLX cells did not contribute to her death, press releases issued by the company shortly before the share sale touted the treatment as a “medical miracle” and “life saving,” but no release was issued regarding the patient’s death.

In the Nov. 8 article, “Girl Dies as Pluristem Sells on Gains With Miracle Cells,” Bloomberg reporter David Wainer wrote, “Pluristem Therapeutics Inc.’s stock doubled in Nasdaq trading from May through September, helped by three news releases announcing that patients’ lives had been saved by injections of the company’s experimental stem cells. … When the first of those patients, a 7-year-old girl with a bone- marrow disease, died four months after the company said her life had been saved, Pluristem was silent. The company raised $34 million selling shares a week later.”

A Bloomberg follow-up on Nov. 9 said that Pluristem had issued a press release “acknowledging the death of a second patient, though it wouldn’t say when the death occurred.” The article added that the company’s stock sank the most in 21 months in Nasdaq stock trading after Bloomberg’s first article appeared.

Pluristem clearly took issue with the report and released a statement saying, “In response to the publicity surrounding this event, Pluristem wishes to make it clear that three patients were given compassionate use treatment with Pluristem's PLX cells. All three had failed all other treatment and were at risk of imminent death. The pediatric patient referred to in the Bloomberg article survived for six months, another patient survived for four months, and the third is still alive. Pluristem believes that these results exceeded longevity expectations. The unfortunate deaths of the patients do not diminish these results.”

Pluristem also asked Bloomberg to issue a correction “specific to the article's claim and implication that Pluristem knew of the death of this patient at the time of a recent capital raising transaction and withheld this information from its investors.”

Learn more:
Business Week 11/7/12
Business Week 11/9/12
Global News Wire