A biotechnology company has come under
fire after reporting the success of its 'life-saving' stem cell based therapies ahead of a major stock
sale, which occurred before investors became aware of news that a patient who
had received its treatment had died.
Two out of the three patients referred to in the relevant company press releases have now died, although no link between the deaths and the
treatment has been suggested. The patients, affected by bone marrow disease,
cancer and leukaemia, had exhausted all other treatment options and were at
risk of 'imminent death', the company has emphasised.
Pluristem Therapeutics, an
Israel-based stem cell company, had seen its stocks rise dramatically between
May and September this year on the back of announcements that three patient's
lives had been saved by its experimental stem cell therapies. A doctor who
treated one of the patients called it a 'medical miracle'.
On 19 September, Pluristem completed a
shares sale that generated $34 million for research expenses. However, it made
no mention that one week before the sale one of the three patients — a
seven-year-old girl with a bone marrow disease — had died. Subsequently, in a
press release Pluristem announced that a second patient had died, although it
is not clear when the death occurred.
In a statement, Pluristem denied that
it knew of the girl's death at the time of the sale and that it withheld
information from investors. 'The company did not learn of this fact until after
the financing was completed', it said. The statement related that Pluristem was not monitoring
the patient after she left hospital and that she had returned to her home country of
Romania. Furthermore, it said there was 'no
connection between the [stem cell treatment administered] and the death of the
The company has stood by its earlier
announcements. Zami Aberman, Pluristem's chief executive officer, told
Bloomberg News that because 'we saw significant improvement in the blood count,
we declared a successful treatment'. The patients received treatment under
the compassionate use programme, which allows experimental therapies to be used
when no other treatment options are available. Pluristem said that the extended
survival of the two patients that have subsequently died 'exceeded longevity
expectations'. It added that, 'the unfortunate deaths of the patients do not
diminish these results'.
It is not been suggested that Pluristem has
breached any laws by its announcements or subsequent stock sale. John Nester, a spokesperson for the US
Securities and Exchange Commission (SEC) told Bloomberg that the law requires
companies 'to disclose information that a reasonable investor would consider
important when deciding whether to buy, sell or hold a security'. It is not
presently clear whether the SEC is investigating.
Most companies do not report on the
results of compassionate treatments because of fears of raising false hope on
the basis of a small number of cases. Christopher Bravery, an independent
regulatory consultant told Bloomberg that such cases are 'purely anecdotal' and
bear little statistical significance.
Pluristem said in its statement: 'Compassionate
use cases are entirely experimental and last resort efforts in desperate
situations and obviously not predictive of ultimate success or failure. Further,
adverse results from causes unrelated to the subject therapy are also
irrelevant in the evaluation of that therapy'.
Others have questioned the pitch of
the initial sale. 'Such press releases risk misleading investors by creating
overly optimistic account of scientific research', said Dr Leigh Turner, an associate
professor at the University of Minnesota Centre for Bioethics. 'More
importantly, press releases describing miracles and life-saving cures are
harmful because they give seriously ill individuals an unrealistic account of
effectiveness of experimental stem cell interventions'.
Pluristem's stem cell product, PLX
cell treatment, is not currently approved for human use but has been involved
in clinical trials. In the USA, unapproved treatments may be used for seriously
ill patients where there is no treatment available.